Above is a monthly and a daily chart of novartis (NVS). We believe novartis is in the early stages of a nice rally for the next few months, upto 45-50 or so.
Lets look at our arguments for it.
Daily chart :
1) NVS just broke a down trend line from 5 months on decent volume surge.
2) Daily moving averages stars (pps>5>20>50) are aligned alright, making a case for the rally upto the 200d.
3) Our preferred EW labelling has us in the wave 3 stage of the C corrective wave.
Monthly chart:
1) NVS made its all time high in 2006, and as per our preferred our ew labelling has finished a huge corrective wave of A
2) The bottom in march (~33) was in the area of the previous 4th wave triangle as well as a bounce of the 200 month moving average.
3) The monthly stochs are turning up, the weekly macd has crossed over.
All in one, things looks good here for NVS. We would buy it with a daily close stop below the daily average neckties (say a break of 36). The target is around 45-50 in a month or two. Risk/Reward wise the trade is set up very nicely indeed.
BTW, the company seems to have a stable dividend of > 4%.
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