One caller during the Mad Money 'Lightning Round" Monday evening, asked Jim Cramer about Home Bancshares (HOMB) : "This is a good situation. I like all of the banks. This one is not that expensive," replied Cramer.
Let's check out the charts.
In this daily bar chart of HOMB, below, we can see that prices have been in an uptrend the past 12 months. HOMB may have made a short-term reversal the other day and is now testing the rising 50-day moving average line. The slope of the 200-day moving average line is positive and intersects down around $21.
The On-Balance-Volume (OBV) line shows a rise from late September but now shows a rounding over pattern suggesting a shift from aggressive buying towards aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator shows a bearish divergence with a much lower high in May as prices made a higher high.
In this weekly Japanese candlestick chart of HOMB, below, we can see a large upper shadow as traders rejected the highs. Prices are above the rising 40-week moving average line but this is a lagging indicator.
The weekly OBV line shows a peak in early March and the MACD oscillator is poised to cross to the downside for a potential take profits sell signal.
In this daily Point and Figure chart of HOMB, below, we can see that the software is projecting a target of $30. A trade at $25.68 is likely to weaken the picture.
In this weekly Point and Figure chart of HOMB, below, we can see that prices reached and exceeded a $22 price target.
Bottom line strategy: Longer-term we could see HOMB trade higher. In the short run we could see HOMB pull back to the $24 area or maybe a little lower towards $22. Let's wait and see how things develop before recommending a long position.