This week's earnings include those from Adobe (ADBE) , which has its finger on the pulse of the cloud. Adobe is due to report its quarterly figures after the close of trading Thursday.
We recommended a bullish approach to shares of ADBE last year but let's see how things look now ahead of earnings.
In the daily bar chart of ADBE, below, we can see how prices have broken above the highs going back to late August/early September. Prices are above the rising 50-day moving average line and above the rising 200-day line.
Trading volume has not expanded sharply with the breakout but the On-Balance-Volume (OBV) line is pointing higher and the Moving Average Convergence Divergence (MACD) oscillator has crossed above the zero line for a buy signal.
In the weekly Japanese candlestick chart of ADBE, below, we see a bullish picture. Prices are trading at a new high above a long consolidation pattern. Prices are above the rising 40-week moving average line.
The weekly OBV line shows a pickup from March. The MACD oscillator is in a bullish alignment.
In this daily Point and Figure chart of ADBE, below, we can see the upside breakout and a potential $589 price target.
In this weekly Point and Figure chart of ADBE, below, we can see a longer-term price target of $707.
Bottom-line strategy: ADBE is showing a powerful move to the upside ahead of earnings. Hold longs and add to longs at current levels. Risk to $510 for now. The $589 area is our first upside price objective.
