Western Alliance (WAL) is a holding company for other banks and its chart is breaking out on the topside. We recently recommended JP Morgan (JPM) and Bank of America (BAC) so a positive-looking chart for WAL should not be a big surprise.
Let's check.
In this daily bar chart of WAL, below, we can see that prices are breaking out on the upside of a seven-month high-level consolidation pattern. This large rectangle pattern should be able to support significant gains in the weeks and months ahead. Prices are trading above the rising 50-day and 200-day moving average lines.
The On-Balance-Volume (OBV) line has turned up with the rising price action from the middle of September. A rising OBV line happens when the trading volume on up days is heavier than the trading volume on down days.
The Moving Average Convergence Divergence (MACD) oscillator is bullish and supports the overall bullish picture for WAL.
In this weekly Japanese candlestick chart of WAL, below, we can see that prices are breaking out on the upside from a $90-$110 consolidation pattern. Prices are above the rising 40-week moving average line.
The weekly OBV line has made a new high for the move up to confirm the price gains. The trend-following MACD oscillator is crossing to the upside for a fresh outright buy signal.
In this daily Point and Figure chart of WAL, below, we can see the recent price strength and an upside price target in the $126 area.
In this weekly Point and Figure chart of WAL, below, the software is counting the X's and O's for a possible $150 target price.
Bottom line strategy: With WAL turning higher with other banks it is no surprise that the ( XLF) , the Financial Select Sector SPDR ETF, looks strong. Traders looking for an individual security could go long WAL at current levels risking to $100 for now. The $150 area is our price objective.
