Coty Inc. (COTY) -- the makeup and perfume company -- is up sharply Tuesday on the heels of its second-quarter earnings that beat earnings per share and revenue estimates. The stock price surged to $13 earlier in the day and pulled back, but it is still up more than 12%. Has the chart changed much? Let's check and see.
In this daily bar chart of COTY, below, we can see Tuesday's gap up and over the declining 50-day moving average line and the bottoming 200-day moving average line. Prices are in the lower half of the day's range. Trading volume is not up significantly and the daily On-Balance-Volume (OBV) has been neutral since July. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line since December. Not a picture of technical strength nor accumulation (buying).
In this weekly bar chart of COTY, below, we can see that prices are still in a potential bottoming formation. Prices may be above the 40-week moving average line but the slope of the line is still bearish. The weekly OBV line is neutral and the MACD oscillator is neutral as the indicator has been hugging the zero line.
In this Point and Figure chart of COTY, below, we can see Tuesday's rally with no gap. A potential $18 price target is projected.
Bottom line strategy: Positive fundamental news and a bullish price gap sound constructive, but the overall condition of the indicators is neutral. COTY needs more basing to get me to recommend a long position.