VMware Inc. (VMW) has been trading sideways since June and its up and down swings have been getting wider. Prices are getting ready to make a move but which way will it be? Let's drill down in the charts and indicators to see if we can get any useful insights.
In this daily bar chart of VMW, below, we can see that VMW has been oscillating around $150 or so for months. The 50-day moving average line has generally been moving sideways since August to roughly match the prices moves. Prices have been testing the rising 200-day moving average line since late October with January seeing many "false signals". Volume has been hard to read and the On-Balance-Volume (OBV) line has been neutral since around April - neither buyers nor sellers appear to be aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been above and below the zero line several times but now it is moving back towards the zero line from below for a possible go long signal.
In this weekly bar chart of VMW, below, we see a clear uptrend and the sideways activity on the daily chart is just a "blip". Prices are testing the cresting 40-week moving average line and could easily close above it. The weekly OBV line has been steady to higher the past year and it is not far from making a new high close. The weekly MACD oscillator is narrowing and could generate a new outright buy signal in the next few weeks.
In this Point and Figure chart of VMW, below, we can see a triple top pattern with three highs at $150.93. A trade at $152.44 will be an upside breakout and open the way potentially to a $172.35 price target.
Bottom line strategy: some of the indicators are neutral but with the Point and Figure chart being so close to an important upside breakout I wan to favor the long side. Aggressive traders can go long above $152.44 and above $160. Look for the low $170's. Risk below $140.