During Wednesday's "Lightning Round" segment of Mad Money, one caller asked Jim Cramer about GrowGeneration (GRWG) : "I'm not going to recommend this stock at these levels. Take profits," was his advice.
I have recommended taking profits on GRWG back on December 3 and again on January 11 so I obviously left a lot of money on the table. Let's check the charts one more time to see if the third time's the charm.
In this updated daily Japanese candlestick chart of GRWG, below, we can see that prices pulled back in early December and again from the middle of January but soared to higher highs this month. Prices stand about three times the intersection of the rising 200-day moving average line, so GRWG is extended or overbought by that metric. Trading volume has been drying up since November and that is not comforting.
The daily On-Balance-Volume (OBV) line has not kept up with the price gains since December. The Moving Average Convergence Divergence (MACD) oscillator has made three take profit crossovers since December. If at first you don't succeed...
In this weekly chart we can see the parabolic run up from the base around $5. Impressive. In this time frame the OBV line is bullish and so is the MACD oscillator.
In this daily Point and Figure chart of GRWG, below, we can see a potential upside price target of $120 but the chart really needs to catch its breath.
Bottom line strategy: When you happen to get a stock that goes parabolic it is a real rush. You want to check your position and profits several times an hour. You dream that it can continue to the end of the day, week, month or whatever. At some point the music stops and there is a pullback or correction or worse.