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The Fibocall: Illinois Tool Works

After 10 straight up days, just be aware of what is ahead.
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By now, you all know just how much I like to examine charts with long-term conditions or long-term signals that were triggered. Today, Illinois Tool Works (ITW) has generated a long-term overbought condition and it took 10 straight up days to get there.

Let's review previous long-term signals of ITW:

May: Long-term overbought and a more than 3% pullback.

June: Long-term overbought again and a 2.5% pullback.

August: Long-term oversold and a rally of more than 8% to today's high around $88.80.

ITW triggered a long-term oversold signal on Aug. 4. At that time, ITW was testing the 200-day moving average at $82.63 and inside the buying zone at $82.88 to $81.31. The buying zone came from the Feb. 4 low of $76.25 and the June 20 high of $89.50. Now ITW is back to a long-term overbought condition with no downside momentum yet. The June top came on June 20 and the next trading day, June 23, ITW opened lower and has not traded above that $89.50 level since.

I will not pick the top -- unless I get lucky -- but after 10 straight up days, just be aware of what is ahead. Watch for a reversal day to start making sales. I will advise pullback levels once the short-term top is confirmed.

At the time of publication, Berman had no positions in the stocks mentioned.