• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Stanley Black & Decker Hammers Out an Impressive Consolidation Pattern

The charts of the toolmaker indicate its shares could rise significantly from current levels.
By BRUCE KAMICH
Jul 20, 2020 | 08:08 AM EDT
Stocks quotes in this article: SWK

Last Friday Jim Cramer talked about the housing market, which was receiving a big lift from Jay Powell and lower interest rates. He mentioned what goes into a house: lumber, copper, glass and paint to start. Cabinets, sinks, appliances and wiring, too. Construction means good things for Stanley Black & Decker (SWK) , which keeps beating numbers and raising numbers. Let's check out the charts of SWK.  

In this daily bar chart of SWK, below, we can see that prices suffered a steep decline of $100 from February into late March. SWK has rebounded in the past three months or so with a few corrections along the way. Both moving averages are rising.

Trading volume has remained active since late February and the On-Balance-Volume (OBV) line has moved higher from late March to make a new high for the move up; this is bullish for prices as it tells us that buyers of SWK have been more aggressive these past few months, and we believe that volume precedes price and that prices soon could make a new 2020 high. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in May for an outright buy signal. The indicator corrected into July and is now turning upward for a new buy signal. 

 

In this weekly bar chart of SWK, below, we went back five years to get a better perspective on the price action. The February-March decline broke the 2019 lows, which is normally pretty bearish. However, prices quickly recovered. A breakout over the highs of the past couple years could be the path of least resistance now. Prices are back above the rising 40-week moving average line. The weekly OBV line did not break its respective lows and has since started a new up move. The MACD oscillator is quickly approaching the underside of the zero line and hopefully a buy signal on this longer time frame. 

 

In this daily Point and Figure chart of SWK, below, we can see the price movement without any price gaps. The nearby price target is likely to be reached here on Monday for an upside breakout.  

In this weekly Point and Figure chart of SWK, bellow, we can see a more impressive upside price target of $267. It which implies a breakout from the large consolidation pattern on the weekly bar chart in the $110 to $175 area, which projects to a target of at least $240 (the height of the pattern is $65 and when added to a breakout at $175 gives us a target of $240).  

Bottom line strategy: Aggressive traders could go long SWK at current levels and they can add on strength. Risk a close below $138 for now. Targets start at $175 and range up to $240 and $267 longer term.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Earnings | Investing | Stocks | Technical Analysis | Construction & Engineering | Consumer | Household Products | Real Money

More from Stocks

A Recipe for a Rebound

Paul Price
Jan 28, 2021 7:00 AM EST

Here's how to play Ingredion as it looks set to rise.

A Rush to Rotate Into Short-Squeeze Plays Is Roiling the Market

James "Rev Shark" DePorre
Jan 28, 2021 6:27 AM EST

The market is struggling with instability as a massive, short-squeeze movement continues. 'Good' stocks are being dumped by funds to pay for short-selling losses.

If You Think the Selling Started Yesterday, You Have a Short Memory

Helene Meisler
Jan 28, 2021 6:00 AM EST

A lot of what we saw on Wednesday has been in the works for a while now.

Emotions Run High as Indexes Slip

James "Rev Shark" DePorre
Jan 27, 2021 4:44 PM EST

I've raised a bit of cash, but it's still unclear what will emerge from here.

3 Important Questions the Fed Answered Wednesday

Tom Graff
Jan 27, 2021 4:30 PM EST

Powell was asked a number of questions about asset bubbles and financial stability risks during his press conference.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 06:43 AM EST BOB LANG

    Webinar Time -- After the Close today

    join me later today as we talk about markets and w...
  • 11:48 AM EST STEPHEN GUILFOYLE

    Cashing in Some More Chips at Stocks Under $10

    We're trimming a position for a big gain today.
  • 08:34 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 1/27/2021

    The "correction" can be coming sooner than we thou...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login