Xerox Is Looking Attractive on the Charts: Copy That!

On Wednesday traders got to react to news that Xerox Holdings Corp. (XRX) was looking to merge with Hewlett Packard (HPQ)  . That makes a lot of sense, Jim Cramer said during his Mad Money program, but there's little chance HP will be interested in a merger. Buying Xerox as a stand-alone investment, however, makes more sense, Cramer noted. 

Let's check out the charts of XRX.  

In this daily bar chart of XRX, below, we can see that prices have broken out on the upside in recent days. The highs of June/July have been broken on heavy trading volume telling us there is a lot of energy behind this move higher. Prices turned higher in August and some gaps to the upside tell us the move is powerful.

XRX is above the rising 50-day moving average line and the rising 200-day line.

The On-Balance-Volume (OBV) line has been rising from August and is very close to making a new high of its own to confirm the new price highs.

The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in October for an outright go long signal. 

In this weekly bar chart of XRX, below, we can see that prices are breaking out above the highs of late 2017 as well as the highs of 2019.

The 40-week moving average line has been rising this year and the weekly OBV line just made a new high to confirm the price gains.

The weekly MACD oscillator is crossing to the upside for both a cover shorts buy signal and an outright buy signal.  

In this Point and Figure chart of XRX, below, we have used weekly close only prices to create the X's and O's. A potential long-term price target of $53 is being projected.  

Bottom line strategy: Traders could go long XRX at current levels risking a close below $33. The $50 area is our longer-term price objective.

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