During Monday's "Mad Money" show, host Jim Cramer called Lemonade Inc. (LMND) "fantastic" in response to a caller's question about the company.
This new issue is a property and casualty insurance firm that offers renter- and home-insurance policies for homes, apartments co-ops and condos. We last looked at LMND on July 24 and wrote that, "Two things to look out for. If LMND holds up better than the broader market as it undergoes some profit-taking and rotation it is a bullish sign, in my opinion. Second, if we see a trade at $88.72 it is a signal to go long. Add to longs above $90. Not for the inexperienced."
In this updated daily Japanese candlestick chart of LMND, below, we can see that prices have been basing since late July. Prices look like they have hammered out a saucer bottom with a neckline around $70. With limited price history we used the 20-day and 50-day moving averages, which have now have positive or bullish slopes. The On-Balance-Volume (OBV) line bottomed in early September and has shown improvement. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero-line, but shows some narrowing.
In this daily Point and Figure of LMND, below, we can see a bottom pattern and a potential $110 price target.
Bottom line strategy: LMND could trade sideways a bit longer to widen out its base so traders should look to go long on strength above $75 and risk a close below $65. The $110 area is the price target for now.
