A Real Money subscriber writes that "shares of Shockwave Medical (SWAV) have really rallied the past couple of years. I am long and have good gains. Is there more on the upside?"
Let's check out the charts of this company that has a treatment of atherosclerotic cardiovascular disease through "differentiated and proprietary local delivery of sonic pressure waves for the treatment of calcified plaque."
In the daily bar chart of SWAV, below, we can see that the shares have rallied three-fold in just the past 12 months. Prices have made some temporary or short-lived dips below the rising 50-day moving average line but have remained firmly above the positively sloped 200-day line.
The On-Balance-Volume (OBV) line has moved in a positive direction as traders have been more aggressive buyers than sellers. The trend-following Moving Average Convergence Divergence (MACD) oscillator has spent most of the past year above the zero line in buy territory but is currently in a decline.
In the weekly Japanese candlestick chart of SWAV, below, we see a positive picture with prices in a long uptrend above the rising 40-week moving average line. A good base pattern in the $45 area is visible and could support further gains.
The weekly OBV line is bullish and so is the MACD oscillator. Watch the oscillator for a possible downside crossover, however.
In this daily Point and Figure chart of SWAV, below, we can see that the software is projecting a possible downside price target in the $179 area. A trade at $226.96 is needed to change the direction to up.
This weekly close-only Point and Figure chart of SWAV, below, is yielding a $275 price target.
Bottom-line strategy: To answer the original question -- yes, SWAV has more to go on the upside. There is no top formation visible and prices are oversold and probably close to a low to be followed by fresh gains in the fourth quarter. Raise stops to $179. The $275 area is our target zone for now.
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