Breakups are a great way for companies to unlock a lot of value, Jim Cramer reminded his Mad Money viewers Monday evening. That's certainly been the case with XPO Logistics (XPO) , which recently spun off GXO Logistics (GXO) .
Cramer's long been a fan of XPO Logistics. He said the split of its transportation unit, XPO, and its warehousing operations, GXO, has made the company simpler to follow and has unlocked a ton of value.
Cramer remains a buyer of both companies.
Let's check the charts of XPO. On May 4 we reviewed the charts of XPO, writing that "Understanding spin-offs and such is above my pay grade, but the sense I get from the charts and indicators is that XPO could stall in the weeks ahead."
In this daily bar chart of XPO, below, we can see that prices did stall from May to June to July. XPO only recently made a new high. Prices have dipped slightly in recent days but it is now back above the rising 50-day moving average line.
The On-Balance-Volume (OBV) line shows some softness in June and July but appears to be firming again. A rising OBV line is bullish.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but looks like it has crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of XPO, below, we can see a mixed picture. Prices are in an uptrend above the rising 40-week moving average line. The weekly OBV line shows some improvement from July to August.
The MACD oscillator is pointed down in a take profit sell signal but the two moving averages that make up this indicator are narrowing.
In this daily Point and Figure chart of XPO, below, we can see a $95 price target.
In this weekly Point and Figure chart of XPO, below, we can see a price target in the $112 area.
Bottom line strategy: Traders could go long XPO at current levels risking below $83 for now. The $95 and $112 areas are our price targets.
