The "Lightning Round" segment of the popular Mad Money program is a viewer favorite. Callers get a chance to ask Jim Cramer about stocks they are interested in. One caller Thursday night asked about Arrowhead Pharmaceuticals (ARWR) : "I like this stock but it is speculative," commented Cramer.
Let's check out the charts of this maker of medicines to treat intractable diseases by silencing the genes that cause them.
In this daily bar chart of ARWR, below, we can see that prices made a long and serious decline from early December to the middle of March. Prices have doubled from the March bottom but that still leaves them well below their zenith.
Prices are trading between the cresting 200-day moving average line and the rising 50-day moving average line.
The On-Balance-Volume (OBV) line declined with the price action to a March low but has only made a slight recovery. The stock price has recovered but buyers are not back in an aggressive way.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and trying to turn higher again.
In this weekly bar chart of ARWR, below, we can see the price action over the past three years. Prices had a long and powerful rally from around $5 to nearly $75 before a deep correction to key support in the $20 area. Prices have bounced from the March low but are still below the rising 40-week moving average line.
The weekly OBV line showed a strong rise until late November and it has since followed prices down with a slight rise in the past two months.
The MACD oscillator on this longer time frame is poised for an upside crossover and potential cover shorts buy signal.
In this daily Point and Figure chart of ARWR, below, we can see that the software is projecting a potential upside price target in the $49 area.
Bottom line strategy: I would look for further sideways trading on ARWR. The Point and Figure chart is bullish but without strong signs that buyers of ARWR have become aggressive, I do not see the point in being a buyer just yet.
