For his second "Executive Decision" segment of Mad Money Wednesday evening, Jim Cramer spoke with Rami Rahim, CEO of Juniper Networks JNPR, the network equipment provider.
The stock trades at 15 times earnings with a 3.5% dividend yield. Juniper is holding its annual analyst event this Friday.
Rahim said that Juniper managed to have a great year, despite the pandemic, by focusing on the segments of the enterprise market that were growing and pivoting to meet the new challenges.
Rahim explained that Juniper was able to reduce network trouble tickets by 90% but using AI to diagnose and fix problems before and as they occurred.
Let's check out the charts and indicators of JNPR. The last time we looked at JNPR was back on May 1 where we wrote that "The rally failure at the key moving averages and a downside price target from our Point and Figure chart tell me that the price of JNPR can correct further to the downside. Avoid the long side for now." Prices have been choppy since May but let's see if that might change.
In this updated daily bar chart of JNPR, below, we can see that prices finally made a low in late October/early November. Prices rallied into late January before a sharp pullback. JNPR is still above the rising 50-day moving average line and the rising 200-day moving average line. The trading volume has been increasing since late November and that is a positive.
The On-Balance-Volume (OBV) line has improved since early November telling us that buyers of JNPR have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and poised to turn upward for a new buy signal.
In this weekly bar chart of JNPR, below, we can see that prices have struggled since late 2018. Prices are finally above the rising 40-week moving average line but the weekly OBV line has not matched or confirmed the price gains. The MACD oscillator finally turned bullish last month.
In this daily Point and Figure chart of JNPR, below, we can see that prices reached and exceeded their $23.48 price target.
In this weekly Point and Figure chart of JNPR, below, we can see a potential price target of $40.
Bottom line strategy: JNPR could be traded from the long side but I would not risk much below $23. The $40 area is our price target.