Jim Cramer weighed in on a number of stocks during the Lightning Round of Mad Money Tuesday night. One name was GlaxoSmithKline plc (GSK) : "I think they're terrific and they're doing a great job." Let's check out the charts of this global pharmaceutical firm.
In the daily bar chart of GSK, below, we can see that prices have been making higher lows from December to the end of May to the middle of August. The highs in the $42.00 to $42.50 area have capped the advance for now. GSK is above the rising 50-day moving average line and above the firming 200-day line.
I don't know what to make of the trading volume but the On-Balance-Volume (OBV) line has curved higher over the past five months and looks close to making a new high for the move up.
The Moving Average Convergence Divergence (MACD) oscillator just turned upward for a cover shorts buy signal. An outright go long signal is close.
In this weekly bar chart of GSK, below, we can see that prices have been in a long sideways pattern with higher lows from late 2017. The $42 area has capped the rallies. GSK is above the slightly rising 40-week moving average line. The weekly OBV line shows improvement from late 2018 and a zigzag pattern this year. The MACD oscillator is above the zero line on this longer time frame.
In this monthly bar chart of GSK going back to 1986, below, we can see a 20-year contracting pattern. This might be the largest triangle I can remember and it suggests that GSK could make a major upside breakout. Notice the very heavy the past four years? There is a bottom pattern on the OBV line and the MACD oscillator is close to crossing above the zero line.
In this Point and Figure chart of GSK, below, we can see a potential upside price target of $49.08 being projected.
Bottom-line strategy: The monthly chart of GSK (above) shows a very large pattern. Typically, the bigger the pattern (base, top, or consolidation) the bigger the resulting move. There are exceptions but I think GSK could be getting close to a major upside move. Go long above $42.50 and risk below the August low.