Technical analysis
Price | € 103.59 | 52 weeks range | € 98.38 - € 135.89 |
Beta | 0.74 | Volume/ average | 8.1m/ 7.0m |
Sector | Healthcare | Dividend | 2.43% |
Medtronic PLC is an Irish and American registered medical device company operating primarily in the United States.
Price
The stock has started a marked bearish descent since September 2021 and we believe that the strong support at $ 100 combined with a possible break of the bearish trendline, could lead to a trend reversal of the stock.
We believe the large $ 100 - $ 107 area can facilitate an accumulation of the price in favor of a rise in the medium to long term: this hypothesis is also supported by the "market profile" which sees $ 103 and $ 108 as points of greatest concentration.
On the weekly chart we can see even more the importance of the support at $ 100, up to 2019 resistance.
Indicators
With regard to the MACD and RSI indicators, we can see a positive divergence with the price which, starting from December 2021, began to record increasing lows with a title that is essentially flat. MACD seems close to exceeding 0 (positive momentum) and the RSI, out of oversold, is forming a promising upward channel.
Also on the weekly chart, MACD and RSI confirm a possible trend change, with the second exiting the oversold zone.
Moving averages
On the daily chart, the 50-day average is playing the role of dynamic resistance: for this reason we believe that the confirmation of the trend change will be given only after a consolidation of the price above the moving average, which we estimate to be between $ 108- 110.
On the weekly chart, we report how the price is now on the 200-day moving average which, looking at previous swings, has played a supportive role since 2012.
Conclusions
At the current price, we believe that MDT is an interesting stock not only to monitor but in which to start building, upon subsequent price confirmations, a medium / long-term position.
The strong support area at $ 100, coupled with the positive divergence of the MACD and RSI indicators, make us think about a possible trend reversal. Confirmation will be given, in our opinion, by a stabilization of the price above the average at 50 days in the area of $ 108-110.
Once above the average, a plausible short-term target could be the intermediate resistance at $ 120 and then aim for the previous high of $ 133.
Despite a very encouraging technical scenario, we report that Medtronic received a warning letter from the FDA on 28/12/2021 (link)
Entry range € 108.00 - € 110.00
Target 1 € 120.00
Target 2 € 133.00
Stop loss € 93.00
Graphs


OTB Global Investments
3 February 2022
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