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Allergan  (AGN) - Get Allergan plc Report shares have been on a three-year jag, prompting many investors, including Jim Cramer and the team at his Action Alerts Plus investment club, to throw in the towel on the botox maker.

But at last the stock is beginning to show signs of life, prompting Cramer, on Tuesday's Mad Moneyepisode, to go over the charts with contributor Tim Collins.

During the shows "Off the Charts" segment, Cramer and Collins started with a weekly chart of Allergan showing part of the brutal decline the stock has suffered from the $250s last summer down to $142 earlier this spring. Collins notes that 2018 has a delivered a different kind of pattern. So far this year Allergan's stock is showing a wedge formation within a wedge formation. While Allergan has had a consistent floor of support in the $140s to $150s, its ceiling of resistance has changed. The stock broke out above the upper end of the smaller wedge last month, and now it's broken out above the larger wedge, too. In short, Allergan has broken through not one but two ceilings of resistance.

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Collins thinks that changes the game. From these levels, he believes Allergan has a clear path higher for at least the next 10 points, meaning shares could get to $186 without much difficulty. He now sees three floors of support: one at $174, one at $162, and the third one at $155. At the same time, Collins only sees one ceiling of resistance, the 2018 high in the mid-$180s. Once that ceiling is breached, shares could get back above $200 without much difficulty.

Adding to the bullish case, Allergan just made what technicians call a bullish crossover, where the 10-week moving average moves above the longer-term 20-week moving average. This kind of crossover is often a sign that a stock is ready to run. In addition, the full stochastic oscillator (a momentum indicator that helps gauge when a stock is overbought or oversold) has been hitting new highs in recent months, even before the stock began to rally.

There is even an inverse head-and shoulders-pattern within the full stochastics, which was swiftly followed by a big move higher. Collins says this could potentially propel the stock much higher, although it's important to note that the stock is very close to reaching overbought levels.

Collins believes there's a real chance that Allergan could make a return to the $200s in the next six to eight months. Worst-case scenario, Collins sees it headed back to the $160s.

For more perspective, Cramer and Collins looked at Allergan's daily chart. This, too, shows a bullish moving-average crossover. In addition, the stock has also made a cup-and-handle pattern, which looks like a little cup-shaped bottom next to, well, a handle where the stock trades sideways for a period.

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Unusually, this handle came before the cup. Usually it's the other way around. As Collins sees it, in the short-term Allergan probably won't move higher than $185 because the recent run has been almost straight up. However, he thinks we've got a floor of support here around $168 from the backwards cup and handle.

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The Chande Trend Meter at the bottom of the chart combines multiple different indicators: Bollinger Bands, the Relative Strength Index, price channels, price changes, and standard deviation across six time frames. It then puts all those numbers into a single score for the sake of simplicity. According to the Chande Trend Meter, Allergan's exhibiting a kind of strength that hasn't been seen since the stock was trading in the $200s, a major change of character compared to the bearish action from the past year.

Notwithstanding the chart patterns, Cramer remains skeptical about Allergan because of growing competitive threats, expiring patents and repeated disappointments.

Cramer and the AAP team are talking more about PepsiCo's (PEP) - Get PepsiCo Inc. Report positive second-quarter results. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.

Over on Real Money, Cramer says Groupon (GRPN) - Get Groupon Inc. Report has created an ecosystem that is attractive to anyone trying to establish themselves in the very-hard-to-win local market. Get more of his insights with a free trial subscription to Real Money.

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