During Tuesday's Mad Money program, Jim Cramer commented that some investors saw Rockwell Automation's (ROK) 1.4% growth as proof positive that our industrial economy is slowing. Most investors, however, saw the strong earnings as a huge win and sent shares up 10.5% by the close.
In this daily bar chart of ROK, below, we can see how prices made a dramatic breakout over the high made back in April. Prices gapped up on very heavy turnover. ROK was already above the rising 50-day moving average line as well as the rising 200-day line. The shorter 50-day moving average line has moved above the slower-to-react 200-day line for a bullish golden cross. Obviously this buy signal came late but it can still be effective in long-trending markets.
The daily On-Balance-Volume (OBV) line has been strong from early October and signals that buyers of ROK have been more aggressive for a number of weeks before their earnings report.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is pointed up and has been bullish since early September.
In this weekly bar chart of ROK, below, we can see that prices have broken a downtrend from 2017.
Prices are above the rising 40-week moving average line and the weekly OBV line has made a new high to confirm and support the price gains.
The MACD oscillator has crossed the zero line for an outright buy signal on this longer time frame.
In this first Point and Figure chart of ROK, below, we can see that prices have met the projected upside price target of $190.
In this second Point and Figure chart of ROK, below, we used weekly data to project a $305 price target.
Bottom line strategy: Aggressive traders could go long ROK in the $200-$195 area provided they can risk a close below $185. The $300 area is our longer-term Point and Figure price target.
