Agilent Technologies Inc (A): Higher Highs Are Ahead!

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Shares of life sciences equipment company Agilent Technologies Inc (NYSE:A), although only marginally higher for the year, have been relatively strong vs. the broader market. And that’s good.

Beat the BellEven better: Agilent stock looks giddy enough to break to fresh 52-week highs.

In the bigger sense, A shares have largely trotted sideways since early 2014, thus consolidating their multiyear rally off the 2009 lows. As such, Agilent still needs to prove itself with actual breakout price action, but active investors and traders would be wise to closely watch A for an upside surprise.

The analyst community is still widely bullish on Agilent stock, with recent upgrades from Goldman Sachs and RW Baird reinforcing the trend. Both companies are now targeting the $48 area for Agilent stock, which for Goldman Sachs was a big leap from its previous price target of $39. The investment bank in early December turned bullish on life-science equipment/tools companies.

Agilent Stock Charts

Going over to the charts, we see that despite the trend-break in the August/September period, Agilent stock remains trending higher and seemingly looks poised to break higher still.

Note that in August/September, A stock broke below its 2009 support line, which at the time was the primary concern of the active investing community through a technical lens. But shares held horizontal support (red dotted line), where a strong bullish reversal took place at a key confluence support zone.

This brings me to an important point.

“Technical” traders and active investors often get overly focused on one metric (say, a trend line, a moving average or another indicator), then fail to notice the bigger-picture multifactor support or resistance zone. I often say that single-factor technical models fail more often than they work. If we focus on multifactor support/resistance areas, however, the chances of them holding and a successful trade resulting from it is much higher.

Agilent stock weekly chart
Click to Enlarge

So after Agilent stock held support in August/September, it worked its way back up to the diagonal line of resistance that stands firm since early 2014. Looking at the daily chart below, we can see that A shares are increasingly coiling up below this line.

In late November, Agilent stock pushed back above the black horizontal line of resistance (previous support) and has been consolidating above there ever since. Last week, the stock gapped higher and marginally broke above multiweek diagonal resistance, which now has the stock firmly pushing up against diagonal resistance from the larger time frame on the above chart.

Agilent stock chart daily
Click to Enlarge

The setup here is straightforward; while less risk-averse traders could try to leg into a long position in Agilent, more risk-averse players may want to first wait for the stock to overcome the $42.50 area on a daily closing basis before buying the stock for a move into the mid- to high $40s into the first quarter of 2016.

Any sharp bearish reversal on a weekly closing basis from these levels would call off the trade.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/12/agilent-technologies-inc-a-agilent-stock/.

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