A Real Money subscriber noted that I recently covered Mastercard (MA) and American Express (AXP) but asked what do the charts reveal for Visa Inc. (V) after its earnings beat on Friday.
Let's check.
In the daily bar chart of V, below, we can see that the shares declined sharply from late July to early December. V has rebounded into early January and then made a retest of the December low. Prices soared on Friday as traders reacted to an earnings beat. V is now back above the 50-day line and the 200-day moving average. Prices have made a higher low and a higher high to establish an uptrend.
The On-Balance-Volume (OBV) line was in a decline from late July but looks like it is turning higher now. The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in December and looks poised to cross above it again.
In this weekly Japanese candlestick chart of V, below, we can see that prices made a huge bullish engulfing pattern in the past two weeks. Prices have rallied above the 40-week moving average line.
The weekly OBV line is starting to show some improvement. The MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of V, below, we can see the new high for the move up and the $287 price target.
Bottom-line strategy: In the short-run V is likely to pull back one or two days to correct the price gains of last week. Aggressive traders could use this dip to go long V. Risk to $205 for now. The $245-$250 area is our first price target.
(Mastercard is a holding in the Action Alerts PLUS member club . Want to be alerted before AAP buys or sells MA? Learn more now. )
