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  1. Home
  2. / Investing
  3. / Stocks

Novocure Could Climb Even Further; Here's Where to Buy

The oncology company already has risen significantly this year, but its charts indicate the rally could continue.
By BRUCE KAMICH
Jun 18, 2019 | 10:44 AM EDT
Stocks quotes in this article: NVCR

During the Lightning Round of "Mad Money" Monday, Jim Cramer had this to say about cancer cure company Novocure Ltd. (NVCR) : "I think this is fantastic." The charts of NVCR are pretty strong, so we want to be a buyer. Let's check out the latest charts and indicators.

In this daily bar chart of NVCR, below, we can see can see a clear pattern of higher lows and higher highs -- the simple definition of an uptrend. Prices have become stronger over the past 12 months if you look at the corrections. The pullback or correction in October-December was deeper than the March-April correction. Shallow corrections are a sign that buyers are anxious to put money to work.

Trading volume looks like it has diminished this year, which is a negative, but the daily On-Balance-Volume (OBV) line shows an improving picture from December and is close to making a new high for the move up. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in early May for an outright go-long signal. Recently the MACD oscillator has narrowed but it is not clear whether we will see a take-profits sell signal in the weeks ahead.

In this weekly bar chart of NVCR, below, we can see that NVCR has made a big run the last three years with a base in the $5-$10 area. The rising 40-week moving average line has done a fantastic job in identifying the uptrend and pointing out buying opportunities. Prices are above the rising 40-week moving average line. The weekly OBV line has been in a bullish uptrend since April 2017 and confirms the bullish rise in prices. The weekly MACD oscillator turned up again from above the zero line for a fresh outright go-long signal.

In this weekly, close-only Point and Figure chart of NVCR, below, we can see an upside price target of $87.

Bottom line strategy: It looks like NVCR has the ability to rally to the $87 area based on a Point and Figure "count." Traders could go long NVCR as close to $55 as possible risking below $49 while targeting the $85-$90 area in the months ahead.

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TAGS: Investing | Stocks | Technical Analysis | Biotechnology | Healthcare | Pharmaceuticals | Mad Money | Real Money

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