Acceleron Pharma Inc. (XLRN) is due to report earnings Wednesday after the marke close. Are prices poised to move higher or lower? Let's check the charts and indicators.
In the daily bar chart of XLRN, below, I see a mixed picture with the indicators and chart patterns. Prices gapped higher at the end of June and even with a correction from September to the end of January the gap has still not been filled. Recently, prices rallied above the declining 50-day moving average line and Tuesday we may close above the rising 200-day moving average line.
Prices look like they have bottomed since the middle of December but the volume pattern and the daily On-Balance-Volume (OBV) line do not confirm a bottom that I could trust. I like to see bottoms or bases where buyers are becoming more aggressive. I do not see that here with XLRN.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has crept back to the underside of the zero line but so far it has not broken the line.
In the weekly bar chart of XLRN, below, we can see a more positive chart and indicators. Prices have doubled in the past two years as a pattern of higher lows and higher highs has unfolded. Prices are currently below the rising 40-week moving average line but a rally above $47 should put XLRN back above the 40-week line.
The weekly OBV line looks stronger than the daily OBV line with a pattern of higher lows the past two years. The MACD oscillator on this longer time frame is narrowing toward a possible cover shorts crossover.
In this Point and Figure chart of XLRN, below, we can see a potential upside price target of $54.00 being projected.
Bottom-line strategy: If we concentrate more on the weekly chart and the Point and Figure chart of XLRN we come away with a positive view at this juncture ahead of the company's latest quarterly figures. If you take a long position use a close below $40 as a risk point. On the upside the $54 area is our first price target.