Shares of General Dynamics (GD) have traded sideways the past two months, but the stock looks ready to make an upside breakout. Let's check the charts to see if this is a good time to enter.
In the daily bar chart of GD, below, we can see that the shares are trading sideways after a rally from early November. This price movement looks like a normal correction within a continuing uptrend. Prices are trading around the 50-day moving average line.
The trading volume has declined and the On-Balance-Volume (OBV) line has decreased slightly, which is typical for a consolidation pattern. The Moving Average Convergence Divergence (MACD) oscillator has declined since early April telling us that the strength of the trend has been weakening. The MACD oscillator is just slightly above the zero line and very narrow.
In the weekly Japanese candlestick chart of GD, below, we do not see any top reversal patterns. Prices are above the rising 40-week moving average line.
The weekly OBV line shows a small dip in May and June. The weekly MACD oscillator has crossed to the downside for a take profits sell signal.
In this daily Point and Figure chart of GD, below, we can see a potential upside price target in the $213 area.
In this weekly close-only Point and Figure chart of GD, below, we can see that the software is projecting a $291 price target.
Bottom-line strategy: The charts and indicators of GD suggest we should soon see a move to the upside. Traders could go long GD at current levels risking to $180. Our first price target is $213.
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