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EMC Corp. Breaks Outs With a Golden Cross

Stock broke from huge bullish saucer by closing above its 50-day, 200-day moving averages


EMC Corp. (EMC) — One of the world’s largest suppliers of enterprise storage systems, EMC also owns 80% of VMware (VMW), an industry-leading provider of server virtualization software. VMW jumped from under $90 in the beginning of February to over $110, in part because it is “moving customers from the client-server era to the mobile-cloud era of computing,” according to ChangeWave Research’s Josh Levine. He estimates that the total capacity for movement from enterprise storage to the public cloud will be more than 400% from 2011 to 2016. 

I last reviewed EMC on Jan. 14, near $25, and before that on Dec. 20, when S&P reported that an anticipated rise in revenue driven by the increased adoption of cloud computing was the basis for its projected steady increase in earnings. It estimates operating EPS of $1.95 in 2014 and $2.12 in 2015. S&P has a “five-star strong buy” recommendation on the stock with a 12-month price target of $32. 

Technically, since Dec. 20, EMC has completed a break from a huge bullish saucer by closing above both its 50-day and 200-day moving averages, flashing a golden cross.

Buy EMC under $26 with a trading target of $32. Investors may want to buy shares for longer-term participation in the expansion of the mobile cloud market. EMC has a dividend yield of 1.5%.

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