Last night on his "Mad Money" show, Jim Cramer interviewed Kevin Conroy, CEO of EXACT Sciences (EXAS) , and Jim created the "Mad Money" Humanization of Pets Index," a fictional ETF to track the bull market in pet-related products. This morning on Real Money I am going to look at the charts behind the stocks in this fictional ETF.
In this daily bar chart of Zoetis Inc. (ZTS) , below, we can see a strong uptrend covering the last 12 months. There are a number of dips and pullbacks/corrections along the way up but they are all relatively short in duration. When corrections are short in terms of time it tells you that buyers are acting aggressively.
Prices are currently above the rising 50-day moving average line but that line could get tested in the days/weeks ahead. ZTS is comfortably above the rising 200-day line.
The daily On-Balance-Volume (OBV) line has been stalled since March which says that it has not confirmed the new price highs for months.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.
In this weekly bar chart of ZTS, below, we can see a mixed picture. Prices are in an uptrend from early 2016. Prices are above the rising 40-week moving average line.
The weekly OBV line has a downward slant since April and suggests that someone has been selling into strength.
The MACD oscillator could turn up or down in the weeks ahead.
This could be a fresh buy signal or a continuation of a take profits sell signal.
In this Point and Figure chart of ZTS, below, we can see an uptrend with a longer-term $102 price target. In the short-term we could see prices pull back further.
Bottom line strategy: ZTS is not showing signs of distribution so the big picture remains bullish but a declining OBV line suggests we could see a pullback to around $85 or so before renewed buying surfaces.
