Danaher Looks Like It Could Stall or Turn Lower

Prices appear to be losing upward momentum and overbought when using the stochastic indicator, so caution is in order.
Stocks quotes in this article: DHR

During Jim Cramer's "Mad Money" program on Wednesday night, a caller asked about Danaher Corp. (DHR) .

"This one just continues to rally, and it's not done. Stay long,"  said Cramer.

Let's check out the charts of this science and technology conglomerate and see if there are any targets or appropriate risk points. 

In this daily bar chart of DHR, below, we can see that prices broke out on the upside from a five-month sideways consolidation pattern.

Prices tested the rising 200-day moving average line in early November and gapped above the rising 50-day moving average line in the middle of November. Prices have since continued higher, but the pace of the rise has slowed from late November to January and this can be seen from the lower highs on the 12-day price momentum study. The On-Balance-Volume (OBV) line had a huge move higher in December and trading volume surged for a time, but has since returned to "normal" levels. Prices are in an uptrend, but I would be cautious.  

 
In this weekly bar chart of DHR, below, we can see that prices made a long consolidation pattern around $100 in 2018, before the stock launched a strong advance in 2019. Trading volume and the OBV line only surged in December and the slow stochastic indicator tells us that prices are "overbought." DHR could continue to rise from here, but the indicators suggest a degree of caution.  
 
 
In this daily Point and Figure chart of DHR, below, we can see a potential upside price target around $190. Point and Figure charts focus only on price changes and ignore volume and time.  
 
 
Bottom line strategy: With prices losing upward momentum and overbought when using the stochastic indicator, I would take a cautious stance on DHR. Longs could be held with an appropriate sell stop, but I would not get aggressive at this juncture.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Technical Analysis | Life Sciences | Conglomerates | Industrials | Market Recon

More from Investing

Economies and Markets Are Adapting to the Environment: Market Recon

Stephen Guilfoyle

I want you to write down what I always tell you, and post it somewhere where you can see it when you need it: Understand, Identify, Adapt, Overcome, and Maintain.

Mastercard Could Test and Perhaps Break Important Support

Bruce Kamich

The charts of the payments giant suggest there is further risk ahead, so check your cost basis and take appropriate action.

Amazon and Walmart Have Unique Strengths in Their Grocery Fight

Eric Jhonsa

The opening of Amazon's first cashierless supermarket highlights one of its competitive strengths. But Walmart has a major strength of its own.

Global Markets Finally Follow Asia's Lead on Covid-19

Alex Frew McMillan

It's clear that the market infection from the Wuhan pneumonia is only just beginning.

Markets Struggle to Price in the Unknown Impact of Covid-19

James "Rev Shark" DePorre

Bounce buyers want to believe there is an overreaction to the virus news, but if downside momentum builds, the selling can continue much longer than many expect.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight