During the 'Lightning Round' segment of Mad Money Wednesday night, Jim Cramer was bullish on KLA Corp. (KLAC) . KLAC is a capital equipment company based in Milpitas, California. It supplies process control and yield management systems for the semiconductor industry and other related nanoelectronics industries. Let's check out the charts and indicators.
In this daily bar chart of KLAC, below, we can see that prices made a strong rise the past 12 months. Recent KLAC gapped down below the cresting 50-day moving average line but prices are holding in the prior resistance area of $165-$155. The rising 200-day moving average line is well below the market. Trading volume did increase on the gap lower but since then it looks like it has diminished. Most chart watchers consider light volume on a decline as a bullish clue as it suggests that traders and investors are not heading for the exits.
The daily On-Balance-Volume (OBV) line shows only a slight decline from the middle of November within the context of a rising OBV line for the past year.
The Moving Average Convergence Divergence (MACD) oscillator has fallen below the zero line for an outright sell signal on this time frame but we could see a cover shorts signal in the days ahead if KLAC rallies.
In this weekly bar chart of KLAC, below, we can see a mostly bullish picture. Prices are well above the rising 40-week moving average line.
The weekly OBV line shows an uptrend from last December and only some slight flattening in recent weeks. The MACD oscillator has only crossed to a take profits sell signal recently.
In this first Point and Figure chart of KLAC, below, we can see a possible downside price target in the $138 area. A trade up at $166.72 will improve the picture.
In this second Point and Figure chart of KLAC, below, we used weekly price information and here a potential price target of $211 is being projected.
Bottom line strategy: Overall the charts and indicators of KLAC look constructive. In the short run we could see further price action around the $160 level but renewed strength is likely into year-end and the first quarter with $200 and then $211 are possible price targets.