After an incredible +400% run higher in Berkshire Hathaway’s stock price from the lows of 2009 to the highs of 2018, the share price has spent much of the past few years stuck in a range. In fact, from 2018 to early this year its share price has traded in a consolidation pattern between $232 and $158, as shown in the long-term monthly chart below.
Source: Admiral Markets MetaTrader 5, #BRKB, Monthly - Data range: from Aug 1, 2004, to Feb 16, 2021, performed on Feb 16, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
The 20-period (blue), 50-period (red) and 100-period (green) exponential moving averages still continue to point upwards, confirming the long-term trend is still up. While Berkshire Hathaway’s share price has ranged for quite a few years a technical breakout has now developed.
In the chart above, February’s monthly candle is trading well above the upper resistance level of the range drawn on in the green box. While the month has not yet closed, a strong close above this level could pave the way for further upside. The weekly chart shows the break more clearly below.
Source: Admiral Markets MetaTrader 5, #BRKB, Weekly - Data range: from Jun 11, 2017, to Feb 16, 2021, performed on Feb 16, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
While the breakout of technical resistance is still fresh, traders may wait for the price to pull back and then test the appetite of buyers to purchase more shares at a better price. With breakout trading, there is always the risk the market may present a false breakout with price coming back inside of the consolidation or range.
However, the daily price chart shows there has been recent buying from investors. Most recently buyers stepped in around the 50-day exponential moving average while the MACD histogram is above the 0 level suggesting the momentum to the upside is still strong.
Source: Admiral Markets MetaTrader 5, #BRKB, Daily - Data range: from May 12, 2020, to Feb 16, 2021, performed on Feb 16, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
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