In his second "Executive Decision" segment Tuesday night on Mad Money, Jim Cramer sat down with Tassos Gianakakos, CEO of MyoKardia Inc. (MYOK) . MYOK is a company that is involved with treating cardiovascular disease. Gianakakos said even though one-third of all people die from some form of cardiovascular disease, there's been little innovation in the space.
The standard of care for many patients are drugs that are 40 or 50 years old, many of which are used to treat the symptoms of heart failure but not the underlying causes. To get to the cause, you need precision medicine, Gianakakos said, and that's what MyoKardia is doing. Gianakakos said the company is doing great science, releasing new data every quarter or two. This is a great fundamental story, but let's look at the charts and indicators.
In this daily bar chart of MYOK, below, we can see that the price of MYOK has trended higher over the past twelve months, but it has not been easy. MYOK has retraced many of the rallies, with several pullbacks and retracements. Prices successfully tested the rising 200-day moving average line in May and June, but this month MYOK has traded through the 200-day average. In the past week, rallies to the underside of the 200-day line have stalled. The slope of the 50-day moving average line turned bearish in early October.
The daily On-Balance-Volume (OBV) line has moved up and down with the price action. Prices have been weak this month, but the OBV line has held steady. The daily Moving Average Convergence Divergence (MACD) oscillator moved to an outright sell signal in early October and the two moving averages that make up this indicator are "on top of each other" and could turn up or down from here.
In this weekly bar chart of MYOK, below, we can see a long base formation back in late 2015 to the latter part of 2017. Prices rallied about four-fold from their base area, rewarding investors. Prices stayed above the rising 40-week moving average line until recently. The weekly moving average line has turned down, and this is a negative going forward, in my opinion.
The weekly On-Balance-Volume (OBV) line has diverged from the price action over the past four months and suggests a risk of lower prices ahead. The weekly MACD oscillator has been making lower highs since last September and last month turned down for another take-profits sell signal.
In this Point and Figure chart of MYOK, below, we can see a potential downside price target of $31.96 being projected.
Bottom line strategy: MYOK looks like it will work lower in the weeks and months ahead. A close below $44 will cause the bulls to throw in the towel and gains above $68 will do the same to the bears.