RingCentral Inc. (RNG) made a huge upside price gap and a high/low trading range Friday. Avaya (AVYA) and RingCentral (RNG) are in talks for a strategic partnership as Avaya moves away from the idea for a full sale of the company, according media sources. Let's take a look to see what that news has done to our charts and indicators and what new price targets may be readable.
In the daily bar chart of RNG, below, we can see that prices were in a downtrend the past four weeks or so and were retesting the $130 support area. RNG was between the rising 50-day moving average line and the rising 200-day line.
The On-Balance-Volume (OBV) line shows only a modest decline the past two months so sellers were not too aggressive and caught wrong-footed or even short ahead of Friday's news. The Moving Average Convergence Divergence (MACD) oscillator has quickly crossed to the upside for a cover shorts buy signal and likely a new buy signal in the next few days.
In the weekly bar chart of RNG, below, we can see that prices have had a tremendous upside move the past three years. Prices are above the rising 40-week moving average line.
The weekly OBV line is likely to turn up again after declining the past two months. The MACD oscillator is in a take profits sell mode but Friday's strength is likely to make that signal reverse.
In this Point and Figure chart of RNG, below, we do not have a price gap and the move up has opened the way to a potential longer-term price target of $265 for RNG.
Bottom-line strategy: Aggressive traders could try to buy RNG around $155. Risk below $145. Our price targets are $200 and then $265.
