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Charts Warm Up to Thermo Fisher Scientific

The name is on Jim Cramer's buy-the-dip list, so let's check it out and see where traders could buy strength.
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Thermo Fisher Scientific (TMO)  is on Jim Cramer's buy-the-dip list, so this is a good time to look at the charts.   

In this daily bar chart of TMO, below, we can see that prices have traded sideways to lower since November. Prices have had a long enough time to digest their previous gains -- a rally from $150 to over $500 in the previous four years. TMO is now trading just below the 50-day and 200-day moving average lines. A small rally will put prices back above these indicators. The On-Balance-Volume (OBV) line shows some weakness since February, but not so much to be truly worried about. The Moving Average Convergence Divergence (MACD) oscillator is slightly below the zero line in sell territory.  

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In this weekly Japanese candlestick chart of TMO, below, we can see some lower shadows in March as traders rejected those lows. The March lows have held to date and should be used as a risk level. The OBV line shows a decline from November but an improvement in May. If the OBV line continues to improve it should point the way to higher prices. The MACD oscillator has been in a decline, but it is still above the zero line and a rally could move it to a fresh buy signal. 

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In this daily Point and Figure chart of TMO, below, we can see a potential downside price target of $423. We can also see that a trade at $483.86 will improve the chart picture.  

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Bottom line strategy: Trading volume on TMO recently has been heavy, but the stock did not crater. I take this as a sign of strength. Traders could buy strength risking below $435 for now.

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