Shares of Whirlpool (NYSE:WHR) are in breakout mode as the new week begins. The stock is trading at new September highs with the help of a 3.5% gain. A powerful fresh rally leg may be on the way after a six-week consolidation pattern ends.
In mid-August Whirlpool topped out just shy of $186.00. Back on July 23 the stock surged 8% following a very solid Q2 earnings report. This high volume surge drove the stock to new 2020 highs. Three week’s later, after extending the rally off the March lows to 190%, Whirlpool had lost its upside momentum. Whirlpool spent the last five weeks consolidating while working off an overbought MACD indicator. During this healthy action the stock gave back little ground while putting in six straight higher monthly lows.
We expect Whirlpool to continue higher in the near term. With home-building activity at a fever pitch, Whirlpool will certainly benefit. A key hurdle for the stock is the $186.00 area. Once clear, we believe Whirlpool will be headed for $200.00 with little in the way of a headwind.
Note: We are long WHR in some managed accounts.
You can read Gary S. Morrow's original post here.