T. Rowe Price Group, Inc. (TROW - Get Report) is one of the stocks mentioned in Jim Cramer's article about the best 12 sectors in the stock market at the end of the third quarter, published earlier on Monday.
This stock broke out on the upside in July over the highs of 2017 and 2016. c, with prices surging to all-time highs. We last looked at TROW at the beginning of May, when it was upgraded by our quantitative service, Quant Ratings.
We summed up our opinion this way: "Go long TROW on strength above $73 and then risk below $68. A breakout over $79 will be very bullish." With TROW giving us the $73 breakout at the end of June, followers of Real Money or our quantitative service should be smiling. Prices are above $90 now.
Let's check our updated charts and indicators to see how we should adjust our strategy with this big winner.
In this daily bar chart of TROW, above, we can see how a number of bullish technical and chart signals kicked in from early June. First we saw the slope of the 50-day moving average line turn up in early June above the 200-day line for a bullish golden cross. The flat 200-day line also began to rise as we moved through June. Once prices closed above the March and April highs around $73, TROW was off and running.
A runaway or measuring gap occurred in July. We can see the On-Balance-Volume (OBV) rise from early April, signaling more aggressive buying and accumulation. In early June, the Moving Average Convergence Divergence (MACD) oscillator moved above the zero line for an outright go long signal. It has remained above the zero line since.
In this four-year weekly bar chart of TROW, above, we can see how price have even broken out over the 2014 and 2015 highs. Prices are clearly above the rising 40-week moving average line. The weekly OBV line has been making new highs and confirms the advance. The weekly MACD oscillator is in a bullish mode.
In this Point and Figure chart of TROW we can see the upside price target of $96.34, but the big round number of $100 should also be considered a potential price target.
Bottom line: hold longs from $73 and $79. Aggressive traders could add to positions around $90 or on a shallow dip. Raise sell stop protection to a close below $84 now.
(This column originally appeared at 9:18 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from Bruce Kamich and other writers even earlier in the trading day.)
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