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Hasbro Is Not Playing; This Stock Is Going Up

Aggressive traders could buy a dip to $100 or a close above $104.
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Hasbro (HAS) has made two strong breakaway gaps in recent months, including yesterday's breakout to a new high. Is this a blow-off, or the start of a new leg higher? Let's check out the latest charts and indicators, instead of rolling the dice.

In this daily chart of HAS, below, we can see a sideways consolidation pattern from April through early February. Prices cross above and below the neutral 50-day moving average line and above and below the rising (bullish) 200-day moving average line. The On-Balance-Volume (OBV) line is neutral to rising until November and December.

This sleepy pattern is upended in early February with a huge breakaway gap to the upside of nearly $10 a share. Volume is very heavy as traders react and buy. The 50-day moving average line turns sharply higher following the price action. The OBV line makes an impressive move to the upside, showing the aggressive buying.

In March and April, HAS moved up to a new high and then pulled back in a shallow correction. HAS dipped below the rising 50-day moving average, but gaped above it yesterday. The OBV line made a new high for the move up and the Moving Average Convergence Divergence (MACD) oscillator is turning up, signaling a cover shorts buy signal from below the zero line.

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In this weekly chart of HAS, above, we can see how the rising 40-week moving average line has had a positive slope for the past three years. HAS is comfortably above this trend-following tool. The weekly OBV line has been positive for much of the last three years, confirming the price gains. The weekly MACD oscillator has been above zero since early 2016 and was narrowing towards a possible crossover, but recent price gains have turned the oscillator up again.

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In this Point and Figure chart of HAS we can see the price changes and reversals without volume and gaps. The breakout at $88 is clear, as is the breakout at $102. The consolidation pattern for much of 2016 gives us an upside price target (the width of the pattern is projected upward) of around $140.

Bottom line: HAS shareholders and my six grandchildren are happy. Prices are pointed up. Sell stops could be raised to $94 and $140 is our new price target, which could be reached by mid-2017. Aggressive traders could buy a dip to $100 or a close above $104.

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