Regular readers of Kamich's Korner on Real Money know that I periodically find interesting stocks to purchase or avoid by culling names generated by TheStreet's Quant Ratings. Jazz Pharmaceuticals Inc. (JAZZ) was recently upgraded to a buy recommendation by our quant service.
Let's check out the charts and indicators of this leader in sleep medicine and with a growing hematology/oncology portfolio.
In the daily bar chart of JAZZ, below, we can see that the shares sold off sharply from January into late March before a rebound got under way. Prices have recovered enough to test the bottoming 200-day moving average line. JAZZ is above the rising 50-day moving average line.
The On-Balance-Volume (OBV) line has largely been moving sideways from March. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line since May but now looks like it shows its strongest reading in a while.
In the weekly bar chart of JAZZ, below, we went back five years to get some perspective. Prices have been in a large sideways range the past five years. The shares look like they will soon close above the declining 40-week moving average line.
The OBV line is very interesting in that it has been going up the past five years even though the shares have been going sideways. This OBV strength suggests long-term accumulation. The MACD oscillator is below the zero line but moving up toward a possible bullish cross.
In this daily Point and Figure chart of JAZZ, below, we can see a potential upside price target of $135.
In this weekly Point and Figure chart of JAZZ, below, we can see a possible longer-term price target of $173 being projected.
Bottom-line strategy: No one investment approach is perfect and successful all the time so it pays, I believe, to combine approaches. The charts of JAZZ are constructive and a quantitative buy recommendation is a plus. Traders could go long JAZZ around $125 risking a close below $115 for now. Our price objectives are $135 and then $173.
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