Last night on his "Mad Money" show, Jim Cramer identified seven stocks he said are so far in the red that they're worth buying on continued weakness. Expedia Group (EXPE) was on that short list.
Why these companies? Cramer said it's because all of them recently reported strong earnings and we know things are going well. There is no guessing. Investors just need to wait for these names to come down to a price they're willing to pay and start buying.
Let's look at the chart of EXPE to see where we might consider buying it.
In this daily bar chart of EXPE, below, we can see that prices have been "rolling over" the past three months. Prices are below the declining 50-day moving average line. EXPE is also below the 200-day line but its slope is slightly positive.
The daily On-Balance-Volume (OBV) line shows a small rise from February to late July and then it has worked lower signaling more aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator just moved below the zero line for an outright sell signal.
In this weekly bar chart of EXPE, below, we can see a number of bearish signals. Prices are below the flat to declining 40-week moving average line.
The weekly OBV line shows a decline over the past few months and the MACD oscillator on this longer time frame has crossed to the downside for a take profits sell signal.
In this Point and Figure chart of EXPE, below, we can see a possible downside price target of $95.12. A rally to $136.63 is needed to turn this chart bullish.
Bottom line strategy: While we have a Point and Figure target at a new low for the year, we can see potential chart support in the $110-$100 area. Defer purchases for now.
