RH (RH) stock is up sharply this Friday on news that Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B) revealed a new position in the company formerly known as Restoration Hardware. Let's take a look at the charts and indicators of this specialty retailer.
In the daily bar chart of RH, below, we can see that prices have been in an uptrend since late May/early June. Prices are above the rising 50-day moving average line after several tests of the line earlier this month. The slower-to-react 200-day line is also shows a positive slope.
The On-Balance-Volume (OBV) line shows a very strong advance from early June telling us that buyers (perhaps Mr. Buffett) have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since June and is now narrowing towards a fresh outright go long signal.
In the weekly bar chart of RH, below, we can see a bullish picture. Prices are well above the highs of 2018. RH is above the rising 40-week moving average line.
The weekly OBV line is bullish and so is the MACD oscillator. The oscillator was narrowing toward a possible take profits signal but the latest burst of price gains is likely to defer that signal.
In this first Point and Figure chart of RH, below, we can see a possible upside price target in the $226 area.
In this second Point and Figure chart of RH, below, we used weekly close only data and the chart is showing up a longer-term price target in the $392 area.
Bottom-line strategy: There are a lot of investors who like to follow and invest like Warren Buffett. At a minimum there are analysts who will be pouring over RH's numbers to see what Buffett sees and perhaps change their ratings and price targets. For me the charts have been bullish and traders should continue to approach RH from the long side. The $225 area is our first price target.
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