In the second "Executive Decision" segment of Mad Money Friday night, Jim Cramer spoke with Dan Springer, CEO of DocuSign (DOCU) .
The company just reported better-than-expected earnings after Thursday's close and its stock jumped 12.6% on Friday. It was a "fantastic" quarter with very bullish guidance, Cramer said, who added that he likes this kind of stay-at-home stock.
The company is accelerating its billings and has a lot of momentum behind it, Springer said. He added that the company's largest competition is paper and manual processes, as companies look to digitize their strategies.
As for Covid-19, Springer said the company is not looking to profit off the event, but has seen companies accelerate activity that they had already planned on doing.
In this daily bar chart of DOCU, below, we can see how prices have reacted to the broad market selloff. DOCU has quickly declined below the 50-day moving average line to test the still rising 200-day moving average line.
The daily On-Balance-Volume (OBV) line has weakened since the middle of February telling us that sellers of DOCU have become more aggressive.
The 12-day price momentum study shows that the pace of the decline has not yet begun to slow. A bullish divergence between the price action and momentum would be a good sign in the days and weeks ahead but we will have to wait for it.
In this weekly bar chart of DOCU, below, we can see the action over the past two years. Prices touched the rising 40-week moving average line.
The weekly OBV line began to turn lower from early February and the 12-price momentum study shows a bearish divergence from November to February as momentum made a lower high when prices made a higher high.
In this first Point and Figure chart of DOCU, below, we used daily price data. Here the software shows a possible downside price target in the $62 area.
In this second Point and Figure chart of DOCU, below, we used weekly price data. Here the downside price target measures to the $41 area.
Bottom line strategy: The company may do better in this current environment but it's the stock of the company that may still suffer. Our nearest downside price target is the $62 area based on the Point and Figure "count".
