For his second "Executive Decision" segment of Monday's Mad Money program, Jim Cramer spoke with Joe Kiani, chairman and CEO of Masimo (MASI) , the medical device maker.
Kiani admitted that Masimo could have done better had the company not been stricken by supply chain woes, but he said conditions are improving and he's bullish about the future.
Masimo is still waiting for full approval to introduce its blood oxygen monitoring system for opioid addiction patients. Kiani said the system is already in use at hospitals and allows for in-home monitoring for non-critical addiction patients.
Kiani was also bullish on Masimo's acquisition of Sound United, which he hopes will usher in the next generation of hearing assistive devices. There are "incredible opportunities to improve hearing," he said.
Let's pay a visit to the charts and indicators.
In this daily bar chart of MASI, below, we can see that prices had a severe decline from November into late April. A large downside price gap in February looks like it can be part of a measured move or a runaway gap. The decline from November to February is roughly equal to the decline from February to late April. Trading volume has been heavier since the middle of February.
The daily On-Balance-Volume (OBV) line has declined from late December but it did not make a new with prices - a bullish divergence. The Moving Average Convergence Divergence (MACD) is also showing us a bullish divergence.
In this weekly Japanese candlestick chart of MASI, below, we can see a mixed but improving picture. Prices declined sharply and on this chart the price gap disappears. The decline is now extended below the negatively sloped 40-week moving average line. Trading volume has been heavy in the past three to four months suggesting we may have seen some "throw in the towel" selling.
The OBV line shows a decline from December to late April with an upturn starting in May. The MACD oscillator has narrowed and is close to an upside crossover and cover shorts buy signal.
In this daily Point and Figure chart of MASI, below, we can see an upside price target in the $165 area.
In this weekly Point and Figure chart of MASI, below, we can see a downside price target in the $65 area.
Bottom line strategy: There are enough bullish clues on the charts to anticipate a recovery rebound for MASI. Aggressive traders could go long MASI at current levels risking to $124. A rebound to $165 and maybe higher is possible in the next few weeks. Do not overstay your welcome.
