Fitbit Needs a New Trainer to Kick-Start a Rally

 | Aug 09, 2018 | 11:53 AM EDT
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Fitbit, Inc. (FIT) has sprinted up and down but it has been unable to develop any lasting stamina for a sustained advance. Let's get a trainer and look at the charts and indicators.

(For more on FIT, see Market's Leap of Faith: Cramer's 'Mad Money' Recap.)

In this daily bar chart of FIT, below, we see a pattern of trading that reminds me of my last EKG. Prices have crossed above and below the 50-day moving average line while the slower-to-react 200-day moving average line has been in a slight downtrend the past 12 months. Volume has not shown much indication of accumulation and volume spikes have not resulted in carryover selling nor buying.

The daily On-Balance-Volume (OBV) was neutral from last August to the end of May. The OBV line turned strong in June but has weakened since then - no stamina.

The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line where it has spent most of its time the past year. The oscillator has narrowed recently and could generate a cover shorts signal but a go long signal is not in the cards right now.

In this weekly bar chart of FIT, below, we see a resting market as prices stay near the $5 level. We even used a log scale on this chart in an effort to show the price swings better. The 40-week moving average line shows a slight decline.

The weekly OBV line is largely bearish and the MACD oscillator lacks any amplitude to analyze. Not much to report on.

In this Point and Figure chart of FIT, below, we can see how little activity there has been since late 2016. There is an upside price target shown but that seems far off with the price down at $5.64 or so.

Bottom line strategy: I see a lot of people wearing Fitbits but I don't see that translating in a rally for the stock.

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