For his second "Executive Decision" segment of Mad Money Tuesday evening, Jim Cramer also spoke with Jim Collins, CEO of Corteva (CTVA) , the agriculture company with shares off 13% for the year after the company suspended forward-looking guidance amid pandemic uncertainty and flooding in the Midwest.
Collins said Corteva has a very strong market share in the seed business, and a growing business in crop protection, with insecticides and other products.
CTVA has a big international business, which has been affected by currency swings. Adding to the uncertainty has been the flooding in the Midwest, which Collins said isn't likely to have a major effect on their bottom line now that the floodwaters have crested. He was hopeful for a quick recovery in transportation, which will lead to a pickup in ethanol use.
Let's check out the charts.
In this daily bar chart of CTVA, below, we can see a rough downtrend the past 12 months. Prices rallied from their March lows but have failed at the underside of the declining 200-day moving average line. Trading volume was not heavy at the March low nor since which tells me that investors are not motivated to buy yet.
The daily On-Balance-Volume (OBV) line is still pointed down from a high in February which tells us that sellers remain more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is not showing us much in the way of trend strength.
In this limited weekly bar chart of CTVA, below, we see a bearish picture. Prices are below the declining 40-week moving average line. The weekly OBV line is weak and so is the MACD oscillator.
In this daily Point and Figure chart of CTVA, below, we can see a potential downside price target of $19.
Bottom line strategy: We do not have a lot of trading history for CTVA but what we do have is not bullish. Avoid the long side of CTVA for now.