Xylem (XYL) provides a wide array offerings for the water industry, including transport, treatment and testing. Let's check out the charts and indicators.
In this daily bar chart of XYL, below, we can see that prices have suffered a big decline the past 12 months. Prices showed a peak back in early September and declined to a low in June. Trading volume increased around the June low and the On-Balance-Volume (OBV) line also shows a low followed by a rise. Prices are trading above the 50-day moving average line.
The 12-day momentum study shows a low in February and a higher low in June, even though prices made a lower low. This difference between the indicator and prices is a bullish divergence and could foreshadow a rally in the days and weeks ahead.
In this weekly Japanese candlestick chart of XYL, below, we are starting to see some improvement. Prices have rejected some of the weakness below $80, which is close to a 50% retracement. The slope of the 40-week moving average line is bearish. The weekly OBV line is quietly improving. The 12-week price momentum study shows us a bullish divergence.
In this daily Point and Figure chart of XYL, below, we can see a potential upside price target in the $103 area.
In this weekly Point and Figure chart of XYL, below, we can see the same $103 price target as the daily chart above.
Bottom line strategy: XYL is likely to broaden out its base pattern. The bigger the base the better. I am putting XYL on my watch list and plan to revisit the charts in the weeks ahead. Meanwhile, check out the fundamentals.
