These Indications Support the Notion of Higher Bristol-Myers Stock Prices

Bristol-Myers Stock
credits:istock.com/Nerthuz

BMY Stock: A Bull Market in Development

I am focusing on Bristol-Myers Squibb Co (NYSE: BMY) stock because there are certain developments currently in play that will determine what the BMY stock price is likely to do next.

These developments are all technical in nature and, therefore, the focus of today’s publication is the Bristol-Myers stock chart—and the indications that have been generated on it.

This is not my first time covering BMY stock, so let me reiterate that I have been bullish on Bristol-Myers shares since June 23, 2017, when a specific signal was generated suggesting that a bull market was in development. I outlined this signal, as well as other developments, in a publication titled “Bristol Myers Stock Puts in a Tradable Bottom,” in which I explained why BMY shares were all set finally appreciate.

The signal that was the focus of my June 23 publication is highlighted on the following Bristol-Myers stock chart.

Bristol Myers Stock Chart

Chart courtesy of StockCharts.com

This BMY stock chart illustrates that a bullish signal was generated when the faster 50-day moving average, which is highlighted in blue, crossed above the slower 200-day moving average, which is highlighted in red. This signal, called a golden cross, is a popular signal used by traders to imply that a bull market is in development.

In this circumstance, the signal acted as it was intended to, and Bristol-Myers stock has been in a bull market,  appreciating by 15.76% since the golden cross was generated.

The moving averages that created the golden cross are in bullish alignment, and the fact that BMY stock is trading above both of these metrics continues to suggest that the bullish implications suggested by this indicator are still intact, and that a bull market is still in development.

The bullish trend that characterizes this bull market is illustrated on the following Bristol-Myers stock chart.

Bristol-Myers stock chart

Chart courtesy of StockCharts.com

This BMY price chart illustrates that, in January 2017, a bullish move toward higher prices began, and it contained the quintessential characteristic that defines all bullish trends, a sequence of higher highs and higher lows.

This bullish trend, which is now over a year in development, is as clear as day, and it is best captured using a simple uptrend line (highlighted in blue in the above chart). This uptrend line was created by connecting the sequence of higher lows, and it represents a defined level of price support.

Thus far, the few times that this uptrend line has been tested, buying pressure has emerged to support it. I can only assume that, as long as Bristol-Myers stock is trading above this uptrend line, a bull market is still in development and, therefore, higher prices are on the horizon.

This notion of a bull market and higher prices is also supported by the constructive price action that has characterized the trading action above the uptrend line.

The constructive price action that I speak of is highlighted on the following Bristol-Myers stock chart.

Bristol Myers Stock Price Chart

Chart courtesy of StockCharts.com

This BMY stock chart has been annotated in order to highlight the constructive price action which has characterized the bullish trend in this investment.

Constructive price action consists of two distinct waves: an impulse wave and a consolidation wave.

The first distinct wave, which is highlighted in green, is an impulse wave. This wave is advancing in nature, and it captures the stage in a bullish trend when the stock makes a sustained advance toward higher prices.

The second distinct wave, which is highlighted in purple, is a consolidation wave. This wave is corrective in nature, and it captures the stage in a bullish trend when the stock price refrains from advancing. The corrective price action serves to unwind overbought conditions, and it creates the necessary environment where an advancing impulse wave can thrive.

In a bull market, these waves work in an alternating fashion to sustain the trend.

Bristol-Myers shares are currently within the confines of a consolidation wave. In order to determine when BMY stock is set to embark on another move toward higher prices, it must complete this wave by breaking above resistance, which currently resides at $65.00.

A break above $65.00 would imply that a new impulse wave is in development, and that the next leg of the bull market is in development

Analyst Take:

Indications on the Bristol-Myers stock chart continue to imply that a bull market is currently in development. As long as the indications that are supporting this bull market remain intact and in bullish alignment, I will maintain my bullish view on BMY stock.