After $500 Million Investment, Software Firm Could Be Poised for Gains
Traders reading the online version of their favorite business newspapers on Monday are finding out that activist investor Starboard Value has reportedly taken a $500 million stake in Autodesk (ADSK) .
Let's check out the charts and see what clues we can glean.
In this daily bar chart of ADSK below, I can see the price action of the past 12 months. I have to imagine the premarket price action with ADSK trading in the $235 area. Prices are in a short-term uptrend and trade above the 50-day and 200-day moving averages. Neither moving average has a positive slope. The trading volume shows increased activity in the past four weeks or so. The On-Balance-Volume (OBV) line has turned up sharply in recent days. The Moving Average Convergence Divergence (MACD) oscillator is about to cross above the zero line for an outright buy signal.
In this weekly Japanese candlestick chart of ADSK below, I can see a constructive chart picture. I can see a number of lower shadows on the candles charting over the past three months. Lower shadows tell us that traders are rejecting the lows. The weekly trading volume histogram shows increased turnover in recent weeks. The OBV line has started to turn upwards. The MACD oscillator is below the zero line but narrowing.
In this daily Point and Figure chart of ADSK below, I can see an upside price target in the $259 area.
In this weekly Point and Figure chart of ADSK below, I can see a price target in the $281 area.
Bottom line strategy: I have no special knowledge of what Starboard Value is planning. The charts suggest that further gains are possible. Stay nimble.
Employees of TheStreet are prohibited from trading individual securities.