Some companies may complain about our current economic environment, but the real champions are winning. That's how shares of Estee Lauder Cos. (EL) have been able to rally 11.8% in just the past week.
Jim Cramer talked about EL during his Mad Money program Tuesday night. Estee Lauder is not a company that sits still. They listen intently to their customers and employees which helps them to anticipate changes. Estee Lauder was one of only a few companies that saw customers shifting away from department stores to specialty retailers and online. The company pivoted early and continued to innovate, keeping customers happy in the process.
Individual investors are not hedge funds, Cramer reminded viewers, and that's why they shouldn't try and trade market rotations like those we've seen recently. Instead, Cramer advised, they should find high quality companies like Estee Lauder, and stick with them.
Let's see what the charts look like today.
In this daily bar chart of EL, below, we can see that prices bottomed in October-January before making a gap to the upside and starting an uptrend. Prices corrected earlier this month but gapped to the upside again. EL is above the rising 50-day moving average line and the rising 200-day line.
The On-Balance-Volume (OBV) line has been positive for much of the past 12 months and is making a new high for the move up to confirm the price gains.
The Moving Average Convergence Divergence (MACD) oscillator is crossing back above the zero line for an outright go long signal.
In this weekly bar chart of EL, below, we can see that prices have come a long way the past three years. 2018 was in large part a year of consolidation and that has helped propel prices higher so far this year.
EL is above the rising 40-week moving average line.
The weekly OBV line is positive and the MACD oscillator has crossed to the upside for another outright buy signal.
In this Point and Figure chart of EL, below, we can see a potential upside price target of $258.
Bottom line strategy: In the short-run EL is likely to trade sideways in the $200-$190 area before resuming its uptrend. If you can risk below $180 you can use dips below $200 to probe the long side of EL with a possible $250-$260 price target.