"I think the stock can go up. I like everything in the pet world," said Cramer.
Let's check out the charts.
In this daily bar chart of ELAN, below, we can see a pattern of higher lows from March. Prices keep getting stalled in the $24-$26 area, but an upside breakout seems to be at hand. ELAN is above the rising 50-day moving average line, but so far stalling at the bottoming 200-day moving average line. The On-Balance-Volume (OBV) line has also been making higher lows from March and it too is close to breaking out to a new high. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line in recent months but looks like it can turn upward.
In this weekly bar chart of ELAN, below, we can see that prices have been weak the past two years. ELAN is testing the downward sloping 40-week moving average line. The OBV line has been rising in recent months and tells us that buyers have been more aggressive. The MACD oscillator is still below the zero-line, but gave us a cover-shorts buy signal at the end of May.
In this daily Point and Figure chart of ELAN, below, we can see a potential price target of around $30. A trade at $25.68 will be a fresh breakout.
Bottom line strategy: Traders could go long ELAN at current levels and above $25.68 risking a close below $22. $30 and then $34 are our price targets.