The Rise of Berkshire Hathaway: Analyzing Stock Performance and Technicals

Shares in Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) closed at a record high on Monday, buoyed by gains in some of the conglomerate’s key holdings, including Apple (AAPL), American Express (AXP), Chevron (CVX), and Occidental Petroleum (OXY). Investors typically view the performance of the company’s stock as a proxy for the health of the U.S. economy due to its diversification across a broad range of industries. Berkshire Hathaway shares added 2.4% to finish Monday’s session at $434.42.

Breakout From Symmetrical Triangle

Since bottoming out midway between the 50- and 200-week moving averages (MAs) in early October last year, Berkshire shares have trended consistently higher. More recently, the price broke out from a symmetrical triangle, a chart pattern that indicates a continuation of the current uptrend. The breakout occurred on the highest weekly trading volume since late February, suggesting buying conviction behind the move. The relative strength index (RSI) sits just below overbought levels to confirm strong price momentum in the stock.

Monitor These Price Levels Amid Further Upside

To forecast potential short-term and longer-term price targets, we can use technical analysis techniques. The measuring principle projects a near-term price target of $465, while a bars pattern suggests a longer-term target of around $500. During retracements, Berkshire shares may find support around $415 from the symmetrical triangle’s top trendline and near a multi-month uptrend line at $390.

Near-Term Price Target

The measuring principle involves calculating the distance between the symmetrical triangle’s trendlines near their widest point and applying that amount to the breakout area. Adding $50 to $415 projects a near-term target at $465.

Longer-Term Price Target

A longer-term price target can be speculated using a chart overlay of prior price action. By aligning the bars pattern from the uptrend preceding the symmetrical triangle with the most recent swing low, a possible upside target of around $500 is indicated.

Watch These Key Retracement Areas

Investors looking for key pullback levels should keep an eye on the $415 area, where Berkshire shares would likely find buying interest near the symmetrical triangle’s top trendline. A more significant retracement could see the stock revisit a multi-month uptrend trendline around $390, in close proximity to the 50-week MA.

As Berkshire Hathaway continues to reach new highs, investors are closely monitoring technical indicators and key price levels to gauge future performance. The company’s diverse holdings and strong performance in key sectors have contributed to its stock’s upward trajectory. By analyzing technical patterns and price targets, investors can make informed decisions about their investment strategies in Berkshire Hathaway.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. As of the date this article was written, the author does not own any of the above securities.