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Hey, good morning everybody! It’s time for our chart of the week, and this week we’re going to be focusing on technology named Celestica; symbol CLS. Let’s take a look at this chart. It’s been very strong for the past four, five months.

So this is one of the top names that is in the IBD 50 – in fact, I think it’s the number one name. And we can see that even during the period of downtrend in December, the stock had been making a series of higher highs – and you can see a nice channel being developed here – of higher highs and higher lows. This is our textbook definition of an uptrend.

Even as relative strength as been making a series of lower highs, lower lows. Someone called that a divergence. Remember, we take consideration of the price chart as our main indicator here. All the other indicators could be lining up bearish, and if the price chart is bullish, then we have to go with the bullish signs of this chart.

Even the money flow, which has calmed down quite a bit, is still on the positive.

We saw recently a bullish crossover in the MACD.

Volume trends are starting to improve here as well too. Look at this nice strong volume over here. We had some nice strong volume in November as well. And the cloud is headed upwards and is green.

So real positive here on Celestica, and I think it’s got some room to probably get up to about the $115 – 120 area – about 15 – 20% from here.

Even more recently when the stock was trying to pull back below that 20 day moving average, it was catching support there. That’s really important. When the stock catches support at the 20 day moving average, it’s telling you that buyers are there to pick up the stock on a dip to that level.

So if it breaks that 20 day moving average and confirms it the following day, that would be a negative. But Celestica is not showing that right now.

Video Length: 00:02:06

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