GlaxoSmithKline PLC (LON:GSK) is definitely a fundamentally endowed company. That said, investors cannot buy-in at any price.
Investors need to learn how to read the market triggers for GSK. This analysis shows some of the key indicators that tell you when to buy and when to sell.
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GSK moving averages show a cyclical pattern characterized by extended bullish timeliness and short-lived bearish trend. The implication is that GSK maintains an overall bullish trend.
For investors, therefore, the way to win is learning when the bullish momentum is building up and when the bears start.
GSK is set for bullish momentum at $40.51
The RSI has been the best indicator for action points on GSK. When the bullish trend is at the end, the RSI turns down sharply even before the moving averages and MACD pick the trend.
This regularly happens when the RSI is close to 70. The RSI declines until it hits 40, at which point it turns up again sharply, signaling the beginning of a new bullish trend.
The bullish trend then lasts 1.5x the period lasted by the bear trend. Almost always, the momentum starts at key support levels.
GlaxoSmithKline is currently at a key support level of $40.50. Last week, the MACD histogram at -0.51 signaled the beginning of declining divergence towards convergence. Both the MACD line and signal line remain bullish.
This week the candlestick pattern shows an upward trend. A combination of these indicators shows with certainty that GSK is at the beginning of another bullish pattern, with the stock rising above $50.
Summary
GlaxoSmithKline has strong fundamentals supporting overall price appreciation. At the current price of $40.83, GSK is trading at a key support level. The stock is set for a bullish trend to last several weeks.
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