During Wednesday night's "Mad Money" program, Jim Cramer mentioned that neither the Fed, nor China, appears ready to back away or relent on their positions, which has caused companies like iRobot Corp. (IRBT) to plunge sharply after the company was left with no choice but to eat the cost of tariffs themselves.
Cramer said he fears the worst may not yet be over. Let's check out the charts of IRBT today to see how much more downside there might be in the weeks ahead.
In this daily bar chart of IRBT, below, we can see that prices quickly tripled from early May to late August. Incredible. It is a much different story since late August. Prices start a slow decline that picks up steam this month as it dives below the rising 50-day moving average in early October and is now testing the flat 200-day average line.
The On-Balance-Volume (OBV) line showed gains from February to September as buyers of IRBT were more aggressive. The OBV line shows weakness this month.
In the lower panel is the 12-day price momentum indicator and it has yet to show a bullish divergence which means the decline has yet to slow.
In this weekly bar chart of IRBT, below, we can see some sell signals. Prices are testing the flat 40-week moving average line.
The weekly OBV line shows a decline from early September and the Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.
In this Point and Figure chart of IRBT, below, we can see a possible downside price projection of around $61.
Bottom line strategy: With several sell signals on the charts above I see no reason to approach the long side of IRBT. The Point and Figure chart suggests that $61 is a potential downside price target. Stand aside.