Wouldn’t it be great if a fortune teller could tell you that you were going to get rich in the stock market. Well maybe the next best thing is about to happen -- if you are prepared to trade Fortune Brands (NYSE:FBHS). The stock of the maker of Masterlock, Moen, Craftsman and Thomasville is about to make a move.
The chart below shows the timing. With the Bollinger Bands® squeezing after a 1-month consolidation, a move is very close.
The stock went through a strong move higher from a February low into a two-humped consolidation between April and July. The break above that would give a target to the upside to $70. There is also the $4 run up from the July 22 pullback to the 50-day SMA up to the current consolidation. A break to the upside gives another target to $68.
Notice that the price is above all of the SMA’s, which are rising. That's a positive. The momentum indicators are split with the RSI in the bullish zone and rising. The MACD has been pulling back, but it is turning toward the bullish side. The MACD is about to cross the signal line and is leveling in the pullback in positive territory.
All of these data points suggest that a break to the upside is the easier path.