Toyota (TM) was upgraded Tuesday to "buy" from "hold" by a major sell-side firm. Let's check out the charts and indicators to see if prices can accelerate to the upside for a while.
In the daily bar chart of TM, below, we can see that the shares made lows in March and again in May. Trading volume around these two lows increased, telling us that traders noticed the level and acted on it. The On-Balance-Volume (OBV) line also made twin lows in March and May.
The trend-following Moving Average Convergence Divergence (MACD) oscillator made a bullish divergence with a higher low in May than in March. The MACD oscillator is not far below the zero line and crossing above the line will be an outright buy signal.
In the weekly Japanese candlestick chart of TM, below, we can see lower shadows in March and May. A steady weekly OBV line adds to the positive picture. The slope of the 40-week moving average line is negative but intersects around $180.
The MACD oscillator is bearish but has been narrowing towards a cover shorts buy signal.
In this daily Point and Figure chart of TM, below, we can see a potential upside price target in the $190 area.
In this second Point and Figure chart of TM, below, we used weekly price data. Here the software suggests a downside price target in the $107 area. If we get a trade at $173.49 or higher we could see the target changed to something bullish.
Bottom-line strategy: Aggressive traders looking for a trading bounce could go long TM at current levels risking to $159. Look for a rally ideally to the $190 area. Stay nimble if conditions change.
