This article originally appeared on RealMoney.com on Sept. 3, 2014 at 11:00 a.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.
This morning, truck manufacturer Navistar (NAV) posted a smaller-than-expected loss, though revenue was on the light side. The interesting part of the report was the company's forward guidance: This year's sales are now expected to come in at the upper end of expectations.
The company sees a rebound in demand, particularly for its heavy-duty trucks, so that's good news going forward. Navistar's stock has nearly doubled in the past two years, but it remains well below its highs in 2011, when it had traded in the $70 range. Based on today's report, is this a good stock to own now?
A look at Navistar's technicals show several positive developments. Since early 2012, the stock has been trapped in a symmetrical triangle, and today's news has the shares pushing against the upper boundary of that pattern. Symmetrical triangles are non-directional by nature; generally, traders wait for the stock to break out of the pattern before they'll take a position. That breakout could happen today, though the stock needs to close above $40 in order for it to pull in additional buyers.
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Navistar's weekly moving average convergence-divergence (MACD) indicator recently flashed a buy signal (shaded yellow). The only remaining obstacle is a patch of resistance from late 2013 (shaded blue). If the breakout holds, Navistar could be headed to the mid-to-high $40s.