In his "No Huddle Offense" segment of Mad Money Wednesday evening, Jim Cramer highlighted a number of stocks he said are far from overvalued. Those stocks included Ford Motor (F) , now that used car prices have finally peaked and PayPal (PYPL) , as digital spending continues to rise.
Let's check on PYPL.
In this daily bar chart of PYPL, below, we can see that prices have weakened a bit in recent weeks. PYPL is trading below the 50-day moving average line. The slope of the 200-day moving average line is positive and it intersects just below $255.
The On-Balance-Volume (OBV) line shows some weakness from July into August as sellers of PYPL have become more aggressive with heavier volume being traded on days when PYPL has closed lower. The Moving Average Convergence Divergence (MACD) oscillator has fallen below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of PYPL, below, we can see a bearish engulfing pattern in July to mark a top reversal pattern. Prices could test the rising 40-week moving average line, which intersects around $255. The weekly OBV line has not broken out over its February high. The MACD oscillator has crossed to the downside for another take-profits sell signal.
In this daily Point and Figure chart of PYPL, below, we can see that the software is projecting a downside price target in the $232 area.
In this weekly Point and Figure chart of PYPL, below, we can see a $461 price target.
Bottom line strategy: PYPL is in a longer-term uptrend with a Point and Figure price target of $461, so our view should be to use price weakness in the weeks ahead to be a buyer.
