We have been following PNR (a London based industrial products company) for many months in the NFTRH+ Notes & Charts segment of NFTRH using this weekly chart. The breakout (B/O) noted refers to the horizontal green lines (now support), not the trend channel (black dashed).
A couple of points here; Pentair has a high level of debt vs. cash (1.5B vs. 108M, ex-div. date Jan. 25) and its valuation is not what I would call a value for such an un-glamorous company (forward P/E 18.20 & P/S 2.67). Ah, but NFTRH+ only cares about the technicals doesn’t it? So on with that…
The daily is constructive as it has so far held the SMA 50 and I added PNR on Tuesday on the pullback (as noted in the Trade Log, accessible under the NFTRH Premium menu). It has since sprung to the resistance of the last two highs, from October and December.
A breakout here would put it on track to break the channel line shown above. A failure here could bring on another test of the SMA 50. Regardless, trends are up and neither daily MACD or RSI are overbought.
As noted in a public post on Dec. 1, PNR has also been sporting a pattern that I had found familiar. That pattern was the bullish one gold sported from 2008 to 2010. Check out the link for that view.
In addition to the weekly view at the top of this post, we can take another look using this weekly chart. The pattern has 2 necklines that I think are viable and the price is now above both of them.
The monthly view shows the pattern in context of its previous uptrend, much like the one in gold from a decade ago.
Rather than a new trade idea, this is just an update on the progress of a stock we have had on radar since early 2017, when a savvy subscriber brought the chart to my attention for its then potential breakout. It has since broken out and the theoretical target is in the high 80s. How will it get there? Will it get there? Will it fail? All good questions for which I don’t have answers.
What I have is a bullish chart that is still on message. The SMA 50 (69.50) can be considered a strict ‘stop loss’ to the bullish case. A more lenient one is below 67.27 and the November low. Although be aware that even a decline to 65 would still keep the price at the support/breakout zone noted on the weekly charts. That is actually an area where an investor might be looking to buy, although the technicals argue that that area need not be tested again.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason), which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.