Skip to main content

Does Eaton Have the Power to Keep Its Rally Going?

Or, is a reversal in the cards for this power management firm?
Comments

Diversified power management company Eaton Corp (ETN) is playing with new highs. Can the rally continue higher or is a reversal in the cards? Let's check out the charts and indicators.

In this daily bar chart of ETN, below, I can see that prices are retesting their September peak. ETN trades above the rising 50-day moving average line and above the rising 200-day line. ETN dipped close to the rising 200-day line in October.

The daily On-Balance-Volume (OBV) line moved higher to its own new high in November and December. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but could turn up or down easily from here.

Image placeholder title

In this weekly Japanese candlestick chart of ETN, below, I can see that prices have been in a rally phase the past 18 months. Prices are trading above the rising 40-week moving average line. The weekly OBV is strong and confirms the price gains we have seen. The MACD oscillator has crossed to the upside for a fresh outright buy signal.

Image placeholder title

In this daily Point and Figure chart of ETN, below, I can see a potential upside price target in the $333 area.

Image placeholder title

In this weekly Point and Figure chart of ETN, below, I can see a $337 price target.

Image placeholder title

Bottom line strategy: Aggressive traders could go long ETN at current levels risking to $225. The round number of $300 is my price target for now.

Employees of TheStreet are prohibited from trading individual securities.