Earlier, we took a look at several areas of the market and where they might be headed as we get set for 2021. Read Part 1 and Part 2 here.
Now let's get down to a couple of individual stocks and their charts.
Hologic
Back in late January, we looked at a company called Hologic Inc. ( HOLX) when it was upgraded to a Buy recommendation by TheStreet's Quant Ratings service. Hologic is a developer and manufacturer of diagnostic medical products.
We wrote that, "Risking below $52 or $51, traders could go long HOLX looking for gains in the weeks ahead to around the $70 area." We would have been stopped out by the end of February before it ultimately reached our price target later in the year.
Let's check the HOLX charts again.
In the updated daily bar chart of HOLX, below, we can see that the shares sank lower into a bottom with the broader market in March. Prices quickly reversed to the upside and by May they were back around their late January level. The rally continued to early August and then the trend shifted sideways to higher.
The On-Balance-Volume (OBV) line turned sideways. Prices stayed above the rising 50-day moving average line and above the rising 200-day moving average line. The Moving Average Convergence Divergence (MACD) oscillator has stayed close to the zero line since September telling us that trend-strength has been minimal.
In the weekly bar chart of HOLX, below, we went back 2011 to get some perspective. Notice the large upper level base pattern around the $40 level. Prices can often go up multiple times from the base level -- a double is easy and a ten-bagger would be spectacular.
The weekly OBV line has been moving sideways the past five years. My second technical analysis teacher way back in 1976 -- Alan Shaw -- used to say "the bigger the base the higher in space." HOLX has a big base.
In this daily Point and Figure chart of HOLX, below, we can see a potential upside price target of $95.
In this weekly Point and Figure chart of HOLX, below, we can see a potential longer-term price target of $143. Not too bad.
Bottom-line strategy: Last year I served up IBM ( IBM) as my " stock pick of the year." It rallied smartly in January and then plunged. Not pretty. This year I am looking to redeem myself with this stock pick -- and a recent IPO. Look to be a buyer of HOLX in the second half of the first quarter.
Duck Creek Technologies
Now I turn my attention to a recent IPO that I think is promising -- Duck Creek Technologies, Inc. ( DCT) . The company develops industry-specific software that helps insurance carriers to deploy and manage their products and services. I think this is an interesting story and I suggest looking to buy DCT near $40 in early 2021.
Big Investing Theme for 2021
Auto-Tech. Find yourself 6-8 or so stocks in this new industry. This is to spread out the risk a little. There will be some singles, maybe a double or two and hopefully a home run or two. It's what people did before ETFs. Think beyond Tesla ( TSLA) .
Thanks for reading my articles on Real Money the past year and good trading in 2021.
