We looked at IDEXX Laboratories (IDXX) last week and took a cautious approach to the price action. Last night Jim Cramer in his "Executive Decision" segment sat down with Jonathan Ayers, chairman, CEO and president of IDEXX. The pet health company posted a six-cents-a-share earnings beat with a 14% rise in revenues and raised forecasts.
(For more on IDXX, see Market's Leap of Faith: Cramer's 'Mad Money' Recap.)
Despite this positive news the chart shows a lower high now. Let's review all our charts and indicators.
In this daily bar chart of IDXX, below, we can see that prices have so far stopped short of its July high.
The trading volume is not particularly strong and the daily On-Balance-Volume (OBV) line is flirting with its July zenith.
The Moving Average Convergence Divergence (MACD) oscillator is still in a take profits mode.
In this daily candlestick chart of IDXX, below, we can see that today's candle pattern is likely to be a doji like the pattern on Wednesday. A doji is when the open and the close are the same or nearly the same and this represents a balance between bulls and bears.
A bearish candle on Friday will go a long way to making this a reversal.
In this weekly bar chart of IDXX, below, not much has changed from last week.
In this Point and Figure chart of IDXX, below, we still have an upside price target but I want to point out that the volume at price data shows that "things are pretty thin" up here and a reversal might be easy.
Bottom line: The market is a discounting mechanism and when a stock does not rally on the face of what is considered bullish news you need to be careful of the long side.