At the beginning of Friday night's Mad Money program Jim Cramer outpointed the stocks he was zeroing in on this week. On Tuesday he noted that we hear from Emerson Electric Co. (EMR) and Cramer said this company should give us a read on the industrial economy.
The stock recently made an upside breakout on one of the charts so let's check it out.
In the daily bar of EMR, below, we can see that prices made a new high for the move up on Friday. EMR is above the rising 50-day moving average line and the rising 200-day line. The 50-day line is not far below the 200-day line and we could see a bullish golden cross of these two averages in the near future.
The daily On-Balance-Volume (OBV) line has been positive in recent months and tells us that buyers of EMR have been more aggressive ahead of earnings.
The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in September for a buy signal and now it is close to a take profits crossover. Strong price gains are likely to turn this indicator to the upside again.
In the weekly bar chart of EMR, below, we can see a bullish alignment of price and indicators. EMR is above the rising 40-week moving average line.
The weekly OBV line has been improving from the middle of August and tells us that buyers have been more aggressive. The weekly MACD oscillator is crossing the zero line for an outright go long signal.
In this Point and Figure chart of EMR, below, we can see the breakout at $72.27 and the potential upside price target of $90.
Bottom-line strategy: I don't know if traders will be surprised or disappointed in EMR's earnings but the charts are all pointed up at this point in time. Stay long and raise stops to $67 for now.
