Five9 Could Climb Still Higher on the Charts

Growth is being driven by the digital transformation and the cloud transformation that have been turbocharged by the pandemic.

For his final "Executive Decision" segment of Mad Money Friday evening, Jim Cramer checked in with Rowan Trollope, CEO of call center software provider Five9 (FIVN) , which just reported a nine-cent-a-share earnings beat.

Trollope said that growth at Five9 is being driven by the digital transformation and the cloud transformation, two trends that have been turbocharged by the pandemic. He said his team has executed extremely well and delivered a lot of wins this quarter.

When asked about their technology, Trollope explained that Five9 provides new inference technologies that lets customers speak in plain English about the reason for their call and artificial intelligence will resolve their problem or route them to where they need to go with incredible accuracy. He said inference systems can shave minutes off of every phone call, translating into huge savings.

Consumers prefer self-service options when they call a company, Trollope added, especially younger consumers and millennials. He said we are only at the beginning of this technology revolution.

Let's check out the charts.

We last looked at FIVN back on August 14 and wrote that, "The charts and indicators suggest that FIVN could trade sideways for a few weeks. Short-term traders might book profits while patient investors could continue to hold longs with stops on a close below $100. The $177 area is our longer-term price objective." Prices traded sideways until early October and then resumed their advance.

In this updated daily bar chart of FIVN, below, we can see that prices did resume their rally and hopefully patient investors stayed with the stock. Prices are above the rising 50-day moving average line and the rising 200-day moving average line. The trading volume was active from February to June but has slowed slightly in recent months.

The On-Balance-Volume (OBV) line shows a rise into October but it has leveled off slightly and needs to be watched closer for clues.

The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since April but is currently in a "take profits" mode.  

 

In this weekly bar chart of FIVN, below, we can see a parabolic rise in the stock over the past three years. Prices are above the rising 40-week moving average line.

 

The weekly OBV line is pointed up and the MACD oscillator is bullish. 

 

 

 

In this daily Point and Figure chart of FIVN, below, we can see that prices have reached and exceeded a $140 price target. 

 

 

 

In this weekly Point and Figure chart of FIVN, below, we can see a potential price target of $224. 

 

 

 

 

Bottom line strategy: Raise stop loss protection to a $135. Our price targets are $177, the round number of $200 and then the new Point and Figure target of $224.

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