For his second "Executive Decision" segment of Wednesday's Mad Money program, Jim Cramer spoke with Gina Drosos, CEO of retailer Signet Jewelers (SIG) .
Drosos said the team at Signet really delivered and it's clear that their new strategies are working. Despite the pandemic, customers are loving Signet's initiatives like virtual jewelry consultants, she said.
Drosos was also bullish on their new product lines, including one in partnership with tennis star Serena Williams. Drosos said the new line is selling very well so far.
When asked about the health of the consumer, Drosos noted that gift giving is back and Signet is seeing more engagements and weddings as the economy slowly reopens.
Let's check out the charts and technical indicators.
In this daily bar chart of SIG, below, we can see that prices are pulling back after making a slight new high in early September. Prices are still above the rising 50-day moving average line but we could see that line tested soon. The rising 200-day line intersects around $55.
The On-Balance-Volume (OBV) line is showing some early weakness after making a slight new high. A declining OBV line tells us that sellers are being more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has narrowed and could soon cross to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of SIG, below, we can see a large bearish gulfing pattern over the past two weeks. This top reversal pattern tells us that prices could either decline or trade sideways as either movement is appropriate using candles.
The slope of the 40-week moving average line is positive. The OBV line shows long-term strength. The MACD oscillator is in decline.
In this daily Point and Figure chart of SIG, below, we can see a potential downside price target in the $61 area.
In this weekly Point and Figure chart of SIG, below, we can see a tentative upside price target in the $142 area.
Bottom line strategy: For the near-term we are going to see a disconnect between bullish fundamentals and charts that are correcting. Eventually the charts are going to get back in synch with the company news and that is when we want to look to be a buyer.
