Back in early June we reviewed the charts and indicators of Medtronic, Inc. ( MDT) and we wrote that "In this Point and Figure chart of MDT, below, we can see a $108 price target but trades at $98.39 and $99.37 are needed to confirm the uptrend." Those trades happened and prices reached our target last month and pushed a little higher recently.
Is this the time to take profits? Let's check the charts again.
In the updated daily candlestick chart of MDT, below, we can see an upper shadow above $110 showing that the new price area was rejected. The On-Balance-Volume (OBV) line shows a small double top and small bearish divergence as prices made a new high but the OBV line did not.
In the lower panel is the 12-day price momentum study, which shows another bearish divergence from late August into September as momentum weakens even though prices make new highs.
In the weekly candle chart, below, we can see that prices made a possible high-wave candle, which can become a reversal pattern. MDT is above the rising 40-week moving average line.
The weekly OBV line is pointed up but well below the high made last September. The 12-week momentum study shows that momentum is slowing.
In this updated Point and Figure chart of MDT, below, we can see that prices reached and passed the adjusted price target of $105.02.
Bottom-line strategy: MDT could be making a small reversal pattern. With some bearish divergences developing and reaching a longer-term price target this becomes a good reason to nail down some profits on MDT.
