Berkshire Hathaway Sets Record High: Key Price Levels to Watch

Berkshire Hathaway (BRK.A, BRK.B) shares closed at a record high on Monday, buoyed by gains in some of the conglomerate’s key holdings. As the stock breaks out from a symmetrical triangle pattern, investors should keep an eye on important price levels to monitor the stock's future movements.



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 textbook symmetrical triangle pattern, indicating a continuation of the current uptrend. Importantly, the initial breakout from the pattern occurred on the highest weekly trading volume since late February, suggesting buying conviction behind the move. Moreover, the relative strength index (RSI) sits just below overbought levels, confirming strong price momentum in the stock.

Monitor These Price Levels Amid Further Upside
Below, we’ll use two different technical analysis techniques to predict near-term and longer-term price targets. These levels help us determine a general area on the chart where Berkshire shares may climb to and encounter resistance if the price continues to trend higher.

Near-Term Price Target
To forecast a potential short-term price target, we can use the measuring principle. We do this by calculating the distance between the symmetrical triangle’s two trendlines near their widest point and apply that amount to the breakout area. For example, we add $50 to $415, which projects a target at $465.

Longer-Term Price Target
Investors can speculate a longer-term price target by using a chart overlay of prior price action. This works by taking the bars pattern from the uptrend that preceded the symmetrical triangle and applying it to the most recent swing low. In this case, we take the bullish bars pattern between October 2023 and February this year and align it with the April low, which indicates a possible upside target of around $500.

Watch These Key Retracement Areas
Investors looking for a key pullback level 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, with this location also sitting in close proximity to the 50-week MA.

In conclusion, Berkshire Hathaway's record high stock price and breakout from a symmetrical triangle pattern suggest a continuation of the current uptrend. Investors should monitor the $465 and $500 price targets, as well as key retracement areas at $415 and $390, to make informed decisions about the stock's future movements.