Stanley Black & Decker (SWK) reported mixed first-quarter earnings Thursday morning and reaffirmed their 2023 outlook. Let's review the condition of the charts and indicators to see if traders will need to measure twice and cut once.
In the daily bar chart of SWK, below, I see that the shares have been trading sideways since September. The stock tested the underside of the declining 200-day moving average line in February and now in May I can see that SWK has closed above the 200-day line and the 50-day line too.
The On-Balance-Volume (OBV) line has been flat/stable since early November. The Moving Average Convergence Divergence (MACD) oscillator has moved above the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of SWK, below, I can see a long decline for SWK followed by a small base pattern. SWK is trading above the bottoming 40-week moving average line.
The weekly OBV line shows us a small double bottom. The MACD oscillator has been improving for months but is still below the zero line.
In this daily Point and Figure chart of SWK, below, I can see an upside price target in the $95 area.
In this weekly Point and Figure chart of SWK, below, I can see a $116 price objective.
Bottom-line strategy: From my technical analysis mentors (Ralph Acampora, Alan Shaw, and Louis Yamada) I learned that price movements should have a relationship -- i.e. a big decline needs a long period of new accumulation (buying) and repair before a new advance can begin. I see upside price targets on the Point and Figure charts above but I feel that SWK needs more sideways price action after its 2021-2022 selloff. Buyers need to be patient.
