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AFLAC: If It Looks Like a Duck and Quacks Like a Bull...

AFL's price action has gotten stronger and stronger since January/February.
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We have not visited with the charts and indicators on Aflac Inc. (AFL) for nearly two years. We got it wrong as our bearish views back then did not play out. There is little consolation in the fact that AFL did not reverse to the upside and break out until April 2016. Prices are now hovering around $82, up from around $56 in early 2016.

The price action for AFL has gotten stronger and stronger since January/February so an entirely new strategy is needed. Let's check the latest charts and indicators and see if we can get it right this time.

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In this daily chart of AFL, above, we can see how many times the stock has bounced off the rising 50-day moving average line since March. Prices are still above the bullish 50-day line and above the rising 200-day moving average line. The stair-step rally in AFL since March shows volume increasing on the rally phases and lighter on the shallow corrections, which is what we want to see.

The On-Balance-Volume (OBV) line has been rising since December, confirming the advance and telling us that buyers of AFL have been more aggressive than the sellers. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since February - another bullish indicator.

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In this weekly bar chart of AFL, above, we can see an uptrend from early 2016 and the $56 area. Prices are still pointed up, firmly above the rising 40-week moving average line. The weekly OBV line has been going up since September 2015 with a secondary rise from December 2016. This long-term advance in the OBV line suggests considerable accumulation the past two years and confirms the bull case.

The weekly MACD oscillator crossed to an outright buy signal in February and is still bullish.

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In this Point and Figure chart of AFL, above, we get a different look at the long term rise in price. The rise is probably not over as there is no distribution visible and there is a longer-term potential price target of $95 indicated.

Bottom line: Traders should approach the long side of AFL on any dip toward $51 risking below $78. Our upside price target is $95.

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