During the Lightning Round of Mad Money on Monday evening, one caller asked about AeroVironment (AVAV) : "We've got to stay away, the stock acts too badly," said Jim Cramer. Let's take a few minutes to check the charts and indicators of this defense and aerospace company.
In this daily bar chart of AVAV, below, we can see that prices have been in a downtrend from the middle of September. There was a bounce early this year but the rally failed and prices have sunk below the December lows. AVAV is trading below the declining 50-day moving average line and the bearish 200-day line.
The On-Balance-Volume (OBV) line has also been in a decline since September and tells us that sellers of AVAV have been more aggressive than buyers with heavier volume being traded on days when AVAV has closed lower.
The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line since March.
This three-year weekly bar chart of AVAV, below, is also bearish. Prices have broken their longer-term uptrend and are retesting former resistance from late 2017 and early 2018 in the $60-$40 area. Prices are below the bearish 40-week moving average line.
The weekly OBV line has been declining from September 2018 and the MACD oscillator is bearish and weak.
In this Point and Figure chart of AVAV, below, we can see a potential downside price target of around $44.
Bottom line strategy: AVAV is in terrible shape on the charts. With a price target in the $44 area from our Point and Figure chart, above, there is no reason, in my opinion, to be a buyer of AVAV at this time.