The fast-paced "Lightning Round" segment of Mad Money is a viewer favorite. This is when Jim Cramer gives his opinion of stocks requested by callers. Friday night one caller asked about GrowGeneration (GRWG) : "This one has tripled, so it's time to take some profits," was Cramer's advice.
We last checked in on GRWG on December 3 and recommended, "If you are long GRWG from our August recommendation you are in the driver's seat as the saying goes. First, raise your stop protection to $31 from below $12. Second, take profits at current levels and scale up to $41 if available. Third, do not start to believe that gains like this happen every day of the week."
Let's check the charts again.
In this updated daily Japanese candlestick chart of GRWG, below, we can see how prices reached our $41 price target in late December. Prices pulled back temporarily before shooting still higher. GRWG is trading above the rising 50-day moving average line and is more than three-times the level of the rising 200-day moving average line and is considered extended or overbought.
The On-Balance-Volume (OBV) line has not moved up to new highs to confirm the price action, thus is a bearish divergence. The Moving Average Convergence Divergence (MACD) oscillator turned up to a fresh buy signal.
In this weekly Japanese candlestick chart of GRWG, below, we can see that prices are up ten-fold from their base pattern around $5.
Prices are extended above the rising 40-week moving average line and the OBV line has not overcome its November peak to confirm the latest price gains.
The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this daily Point and Figure chart of GRWG, below, we can see a price target in the $63 area.
Bottom line strategy: Prices are extended and are up ten-fold from their base area. GRWG shows a bearish divergence between price and the OBV line - two really good reasons to take profits.
