Medtronic plc (MDT) came up in the fast-paced "Lightning Round" of Thursday night's Mad Money program. Jim Cramer's comment on MDT was:"This is a total winner." Let's check the charts and indicators before a long holiday weekend.
In the daily bar chart of MDT, below, we can find bullish and bearish technical signals. MDT made peaks in late September/early October and then again in early December before breaking to the downside. The slope of the 50-day moving average line turned bearish in late October and the rising 200-day line was broken at the end of the year.
Even though prices broke their October lows the rising On-Balance-Volume (OBV) line did not break its respective low. This divergence may be significant. Volume spiked up in early January as prices reached $82.
In the lower panel is the 12-day price momentum study, which shows higher momentum lows from December into January as prices made lower lows. This is a bullish divergence and tells us that the pace of the decline slowed -- probably from scale-down buying.
In this weekly chart of MDT, below, we can see that prices broke out on the upside last year from a long consolidation pattern. Recently prices retreated back to the top end of the consolidation zone. Prices are below the peaking 40-week moving average line.
The weekly OBV line has been declining from a September peak. The weekly Moving Average Convergence Divergence (MACD) oscillator has just started to narrow. It could take a number of weeks for a bullish crossover from this indicator.
In this Point and Figure chart of MDT, below, we can see a downside price target of $74.78, but a trade at $89.96 will be a positive development.
Bottom-line strategy: While the weekly chart of MDT may give us pause, I like the setup on the daily chart. Aggressive traders could go long MDT at current levels and above $90. Risk a close below $85 for a rally back around $98.