In his first "Executive Decision" segment of Thursday's Mad Money program, Jim Cramer sat down with Jim Fitterling, chairman and CEO of Dow, Inc (DOW) .
Fitterling assured investors that Dow is ready for rising inflation. The company has reduced and refinanced its debt and remains committed to their $3 billion share buyback. That's why Dow shares are up 20% for the year.
When asked about input costs, Fitterling explained that 80% of Dow's inputs are natural gas, which is not running wild as oil is. Given that Dow operates in the U.S., Canada and the Middle East, they have distinct advantages over European competitors.
Dow has also committed themselves to helping the environment, unveiling a new ESG strategy that aims to put the company at net zero carbon emissions by 2050.
Let's check out the charts and indicators.
In this daily bar chart of DOW, below, we can see that prices have rallied from a small double bottom in December. Prices are trading above the rising 50-day moving average line and are comfortably above the positively sloped 200-day line. The On-Balance-Volume (OBV) line shows some uneven improvement from early March.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but pointed lower for now.
In this weekly Japanese candlestick chart of DOW, below, we can see that prices are in a longer-term uptrend and trying to start a new "leg" higher. In the past six weeks we can see both lower shadows and upper shadows as trading is in a tighter and tighter range and traders reject the lows and highs.
The 40-week moving average line is climbing. The OBV line is pointed up and tells us that buyers of DOW are more aggressive. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of DOW, below, we can see an upside price target of $75. This is not a big price target but it will be a new high if reached.
In this weekly Point and Figure chart of DOW, below, we used a five box reversal filter and here the software shows an $89 price objective.
Bottom line strategy: Overall it looks like shares of DOW can climb higher but I do not share Jim Fitterling's view of natural gas prices. In the short-run I look for shares of DOW to trade sideways. Let's put DOW on the shopping list for later in the year.
