Conclusion, Investment Implications, Strategy
A mid-July breakout higher from five months of sideways indecision in Xylem, Inc. (XYL) targets a 23% rise to $91.70 per share. This is an Asbury Momentum idea.
Analysis and Rationale
Xylem Inc. (XYL) engages in the design, manufacture, and servicing of engineered products and solutions for the water and wastewater applications in the United States, Europe, the Asia Pacific, and internationally. It operates in three segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions. The company markets and sells its products through a network of direct sales force, resellers, distributors, and value-added solution providers. Xylem Inc. is headquartered in Rye Brook, New York.
Chart 1 below plots XYL daily since January. The green highlights point out a mid-July breakout higher from five months of sideways indecision from the March 23rd low. A sustained rise above the 200-day moving average, a major trend proxy currently situated at $73.74, would further confirm the breakout — as well as a major bullish trend change — and target an additional 23% rise to $91.70 per share.
Chart 1
Table 1 below shows, considering the aforementioned upside target and a protective stop placed below the $71.87 area, a long entry price of $74.48 would provide a 1:6.6 risk/reward ratio (risking $1.00 to make $6.60) with an initial risk of 3.5%.
Table 1
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