Illumina (ILMN) develops and manufactures various life science tools. According to the company's website the company's mission is to improve human health by unlocking the power of the genome. Let's see what kind of power we can unlock by looking at the charts.
In this daily bar chart of ILMN, below, we can see that prices declined from August into early December. Prices have rallied this month to test the underside of the 50-day moving average line, but remain below that line and the 200-day average line. The On-Balance-Volume (OBV) line shows improvement after making a slightly lower low in early December. The 12-day price momentum study made a low in early October and a higher low in November even as prices made a lower low. This difference in movement between prices and the indicator is a bullish divergence and can foreshadow a reversal or a bounce.
In this weekly Japanese candlestick chart of ILMN, below, we can see a bullish engulfing pattern at the end of November and the beginning of December. This two bar bottom reversal helps us mark the low of the decline. Prices are below the 40-week moving average line and the weekly OBV only shows the slightest of improvement this month. The Moving Average Convergence Divergence (MACD) oscillator is narrowing and getting close to a cover shorts buy signal.
In this daily Point and Figure chart of ILMN, below, we can see a potential upside price target in the $503 area.
Bottom line strategy: Aggressive traders could go long ILMN at current levels rising to $350. On the upside we could reach the $500 area in the months ahead.
