Shares of generator company Generac (GNRC) have suffered a long decline the past year but now things are starting to show some improvement.
Let's check out the charts and indicators.
In the daily bar chart of GNRC, below, I can see that the shares have rallied to the underside of the declining 50-day moving average line. The 200-day moving average line is still in a decline and intersects around $200.
The daily On-Balance-Volume (OBV) line declined to a low in early December followed by some slight improvement. The Moving Average Convergence Divergence (MACD) oscillator has been improving from late October but is still below the zero line.
In the weekly Japanese candlestick chart of GNRC, below, I can see the past three years of price history. The shares have suffered a huge decline but now we could see some improvement. Prices are extended below the declining 40-week moving average line.
The weekly OBV line shows weakness to early December followed by the start of some improvement. The MACD oscillator is close to crossing to a cover shorts buy signal.
In this daily Point and Figure chart of GNRC, below, I can see an upside price target in the $128 area.
In this weekly Point and Figure chart of GNRC, below, I can see that prices reached a downside price target of $95. Reaching a price target is not a good reason to buy but it can mean that technically oriented shorts are covering.
Bottom-line strategy: In my October 19 review of GNRC I recommended avoiding the long side of GNRC. Now the long side is looking better. Aggressive traders could go long GNRC on a two-day pullback. Risk to $81. A rally to the $128 area is our target for now.
