New Relic (NEWR) is another name mentioned by Jim Cramer last night on his Mad Money program. Jim had it in a list of smaller cloud companies whose stock has recently performed well. Let's pay a visit to our charts and indicators to see if the strength can continue.
In this daily bar chart of NEWR, below, we can see a bullish configuration of price action and indicators. NEWR made a peak in July and then corrected lower with a small double bottom finally in November and December.
Prices have come charging back up the past five weeks and are now ready to challenge the resistance in the $105-$115 area. NEWR is above the rising 50-day average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line has been improving since November and tells us that buyers of NEWR have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line and rising - a bullish pattern.
In this weekly bar chart of NEWR, below, we can see that prices are positioned to move higher. NEWR is above the rising 40-week moving average line.
The weekly OBV line has started to turn up again and the MACD oscillator just gave a cover shorts buy signal.
In this Point and Figure chart of NEWR, below, we can see an upside price target of $158 being projected.
Bottom line strategy: NEWR could trade sideways for a while but I would be looking for a move up to and probably through resistance in the $105-$115 area. Aggressive traders could go long near $100 and risk a close below $94 looking for gains to $115 and then the upper $150's longer-term.