In his first "Executive Decision" segment of Monday's Mad Money program, Jim Cramer spoke with Rowan Trollope, CEO of Five9 (FIVN) , the contact center software provider.
Trollope explained that contact centers are a company's front door where customers come to interact with them in a digital manner. There are still plenty of companies that have yet to upgrade their customer service operations to a modern software platform.
Five9 plans to lay out their five-year plan to analysts later this week at their analyst day. Trollope said they'll explain how traditional call centers can quickly be replaced with conversational virtual assistants that provide a "delightful experience" for both company and customer.
Using Five9's platform, companies like Under Armour (UA) are building direct connections with customers.
The last time we looked at FIVN was October 4 when we wrote that "The strategy for FIVN could spin in either direction. The lower shadows on the weekly Japanese candlestick chart says we should go long, while the weekly Point and Figure chart is bearish. Put FIVN on your watch list and we can look at it again soon." And here we are.
In this updated daily bar chart of FIVN, below, we can see some interesting patterns. Prices made lower lows from August to early October and then the pattern changed to higher lows. This month prices gapped above the 50-day moving average line and now the line is bottoming. FIVN is still below the 200-day average line but that condition may change soon. The trading volume shows a number of surges since July and they seem to be at price lows.
The math-driven On-Balance-Volume (OBV) line has been strong since early June and tells us that buyers of FIVN have been more aggressive even as prices declined.
The Moving Average Convergence Divergence (MACD) oscillator has improved the past three months and generated a number of cover shorts buy signals. We still need to cross the zero line for an outright buy signal from this trend-following indicator.
In this weekly Japanese candlestick chart of FIVN, below, we can see two bottom reversal patterns since earlier October - a piercing pattern and a bullish engulfing pattern. Prices may just trade sideways but I think the odds are moving towards a turn higher. Prices are below the 40-week moving average line.
The weekly OBV line shows a slight improvement from early October. The MACD oscillator is narrowing towards a cover shorts buy signal.
In this daily Point and Figure chart of FIVN, below, we can see an upside price target in the $216 area.
Bottom line strategy: The charts and indicators of FIVN now show us enough strength to recommend the long side. Traders could go long FIVN at $160 risking to $140. The $216 area is our price target for now.
