What should investors be buying now that vaccines are starting to be administered worldwide and our economy will soon be reopening?
Jim Cramer posed this question to viewers during Tuesday's "Mad Money" program. Back in August, Cramer provided a "Go List" of stocks he said would be at the heart of the recovery. In the middle of the pack were PPG Industries (PPG) . Cramer said he'd still buy this name.
Let's check out the charts.
In this daily bar chart of PPG, below, we can see that the price of PPG has more than doubled from its March low, but we can also see that prices have been struggling to make sustained progress the past two months. Prices recently closed below the rising 50-day moving average line after a number of other successful tests of the line since early August. It will be different this time around if there is follow-through selling. The On-Balance-Volume (OBV) line has started to turn lower and the Moving Average Convergence Divergence (MACD) oscillator is barely above the zero-line, telling us that the upside may be limited at this point.
In this weekly Japanese candlestick chart of PPG, below, we can see two upper shadows above $150 telling us that traders are rejecting those gains. The OBV line shows softness the past three months and the MACD oscillator is crossing to the downside for a take-profit sell signal.
In this daily Point and Figure chart of PPG, below, we can see a potential downside price target in the $134 area.
Bottom line strategy: Traders who are long PPG may want to raise their stop protection to $139, as weakness below $139 could precipitate further weakness.