For his second "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer also spoke with Robert Kramer, president and CEO of Emergent BioSolutions Inc. (EBS) , the vaccine and therapeutics maker working hard to fight COVID-19. Shares of Emergent are up 37.5% over just the past month.
Kramer said Emergent is proud to do everything it can to help with the COVID-19 pandemic. He remained "cautiously optimistic" with the vaccine progress that's been made so far, but noted that with six major players all with candidates in development, "it will be only a matter of time" before we have a successful treatment available.
When asked about their role in vaccine development, Kramer pointed out that Emergent has partnered with companies like Novavax (NVAX) to provide development support for their vaccine, among others. Emergent is also the U.S. supply chain partner for Johnson & Johnson's (JNJ) vaccine candidate and will provide the manufacturing muscle to help bring millions of doses to market.
We last looked at EBS on May 26 and wrote, "If you are long EBS from December, continue to hold risking a close below $79 now. If you have no position and like the fundamentals of EBS I would look to go long around $85 risking a close below $79. The $150 area is our longer-term price objective." Let's check in again on the charts and indicators.
In this updated daily bar chart of EBS, below, we can see that prices broke lower in June and would have stopped out our suggested recommendation. Prices rebased around $70 and eventually resumed the uptrend. Now, EBS is trading around $130 and not all that far from our original price target of $150. Prices are above the rising 50-day moving average line and the rising 200-day moving average line, telling us that the intermediate-term and longer-term trends are up.
The On-Balance-Volume (OBV) line did not dip much in June when prices declined below our stop suggestion and the line moved up into July, telling us that buyers of EBS have been more aggressive. Weakness in the OBV line since the middle of July suggests at least a degree of profit-taking.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line and bullish, but we can see that the two moving averages that comprise this indicator are narrowing. A take-profits sell signal could develop in the days ahead.
In this weekly bar chart of EBS, below, we can see a positive-looking chart. Prices are in an uptrend as they trade above the rising 40-week moving average line. The weekly OBV line has been strong since the middle of 2019, but shows a possible "hiccup" in the past few weeks. The MACD oscillator is very bullish and shows no signs of weakness.
In this Point and Figure chart of EBS, below, we used daily price data, and here the chart suggests a $225 price target.
Bottom line strategy: If you happen to still be long EBS, I would suggest a stop below $110. The $150 area is our first price target and then $225 is possible longer term.