For his final "Executive Decision" segment of Wednesday's "Mad Money" program on CNBC, TheStreet's Jim Cramer sat down with Brian Krzanich, the president and CEO of CDK Global (CDK) . Krzanick is the former CEO of Intel (INTC) you may recall. CDK is an information technology provider to the auto industry.
Krzanich said that while 90% of car buyers do their research online, once they reach their local dealership, the technology stops, with more functions still done on paper. He said there are huge opportunities to digitize and streamline not only car buying, but also leasing, servicing and repair.
Interesting fundamentals but let's turn to the charts and indicators.
In this daily bar chart of CDK, below, we can see that prices have been in a downtrend from January. Prices are below the declining 50-day moving average line and the slower-to-react 200-day moving average line.
The daily On-Balance-Volume (OBV) line has generally declined the past 12 months and tells us that sellers of CDK have been generally more aggressive.
In the lower panel is the 12-day price momentum study which has yet to indicate a bullish divergence. With prices making lower lows a bullish divergence would be when the pace of the decline slows. We are not there yet.
In this weekly bar chart of CDK, below, we can see a bearish situation. Prices are below the declining 40-week moving average line.
The weekly OBV line peaked in December and the Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this Point and Figure chart of CDK, below, we can see the downtrend and a bearish price target of $47.82.
Bottom line strategy: As long as CDK is in a downtrend I see no reason to approach the long side.