By CCN.com: Xerox (XRX) has been one of the S&P 500’s most impressive surprises in 2019. The 113-year-old stock has climbed nearly 50 percent already, and its technical picture suggests the rally is just getting started.
Experts point to the hiring of a new CEO, John Visentin, as the primary driver of growth. With Visentin at the helm, the company is expanding margins by streamlining operations through Project Own. The initiative is expected to drive gross savings of $640 million.
In addition to Project Own, Visentin has also established a shared services operation center that’s expected to save an additional $90 million this year.
As Xerox is not a high growth company, these savings will significantly improve the company’s bottom line.
However, are these measures enough to keep the century-old company’s stock rising? These are steps in the right direction, but the stock is still down by over 82 percent from its all-time high.
Xerox May Be in the Latter Stages of a Multi-Year Accumulation Period
The technical picture suggests that Xerox’s ascent is just getting started. That’s because the stock has been trading in a wide range between $13 and $50 with a midpoint at $31.50 for almost twenty years.
Since October 2009, we’ve seen a significant increase in volume. This tells us that the smart money investors are currently accumulating shares. They are building the base in preparation for what could be a monster bull run.
After all, there’s a saying that goes, “the longer the base, the higher the space.”
“In late 2015, it had stopping action in the form of a Wyckoff sequence of Preliminary Support (PS), Selling Climax (SC), Automatic Rally (AR), and a Secondary Test (ST). Then, it began trading range activity where accumulation became evident.”
Mr. Butterfield continued:
“After being a laggard, the Shakeout put it in the position to have a sharp rally in the first half of 2019. It has then been working on a constructive Backup To The Creek. This backup also came at the 50% retracement level that Mr. Wyckoff always used as a bullish signal. Xerox is now in a position to respect the Backup level and begin another markup to the upside.”
Looks like Xerox is just warming up. The stock may hit the resistance of $50 by year-end.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.com.
Last modified: September 23, 2020 12:55 PM