For his second "Executive Decision" segment of Mad Money Thursday evening, Jim Cramer spoke with Bob Gamgort, chairman and CEO of Keurig Dr. Pepper (KDP) , the beverage maker that reported strong earnings but saw its shares fall 1.5% after the close.
Gamgort said sales continue to be strong at KDP. Sales of Dr. Pepper have grown 17 quarters in a row, he noted, while Canada Dry has seen growth every year for the past 13 years. E-commerce has also become an important distribution channel, and now accounts for 10% of overall sales.
Gamgort was also bullish on their recent partnership with Polar brand seltzer. He called their agreement a "perfect match" of brand and distribution capabilities.
Keurig is still innovating with their new "Duo" line of coffee makers that can make both individual cups as well as pots of coffee. Keurig is also committed to sustainability and their K-cups will be 100% recyclable by the end of this year.
Cramer called Keurig Dr. Pepper "a winner". Let's check and see if the charts are winners too.
In this daily bar chart of KDP, below, we can see that prices made a relatively brief decline in March and have climbed back up to retest the highs set back in November of last year. Prices are trading above the rising 50-day moving average line and above the rising 200-day moving average line.
A bullish golden cross of these two averages can be seen at the beginning of July. The trading volume was heavy in March and in May/June.
The On-Balance-Volume (OBV) line did not make its low until late May and has been rising since then telling us that buyers have become more aggressive in recent weeks.
The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment despite Thursday's decline.
In this daily Point and Figure chart of KDP, below, we can see a longer-term upside price in the $54-$55 area. Not bad.
Bottom line strategy: Traders could go long KDP on strength above $32 (a new high on the Point and Figure chart, above). Risk a close below $29 while looking for strength to the $55 area longer-term.