In his "No-Huddle Offense" segment of Mad Money Thursday night, Jim Cramer reminded viewers that there simply is no cure for stupidity. That's been his take as he's watched investors try to trade during the pre-market hours on the earnings headlines alone. Cramer said investors must listen to the conference call, or they simply won't have the context to make informed decisions.
That was the case Thursday with J. B. Hunt Transport Services (JBHT) , which fell on its earnings release, only to bounce $8 from its lows once investors received the full story on the conference call. Interesting. Let's review the charts and indicators to round out the analysis.
In this daily bar chart of JBHT, below, we can see that prices were in a downtrend until this month. Prices made a low in late May and we saw quick retests in June and July. In recent sessions JBHT has rallied sharply.
Closing above the bottoming 50-day moving average line, gapping up and now probably closing above the declining 200-day moving average line.
The daily On-Balance-Volume (OBV) turned up and the Moving Average Convergence Divergence (MACD) oscillator closed above the zero line for an outright go long buy signal.
In this weekly bar chart of JBHT, below, we can see that prices are back to the declining 40-week moving average line.
The weekly OBV line shows strength from late May and the MACD oscillator is crossing to the upside for a cover shorts buy signal.
In this Point and Figure chart of JBHT, below, we can see a bottom pattern with a potential price target of $129.77 but we cannot ignore that there is a fair amount of overhead resistance.
Bottom line strategy: JBHT has rebounded sharply but we need to remember two things - one is the base before this rally is not all that big and second, there is plenty of overhead chart resistance up to $115. I feel more comfortable going long JBHT back in the $95-$93 area if there is a pullback.