In his Homework segment of Wednesday's "Mad Money" program, Jim Cramer follows up on stocks that stumped him during earlier shows.
Sea Limited (SE) , he said, was a great gaming and e-commerce story, but the stock is too expensive to invest in. Shares have risen from $11 to $40 in just a few months, and after a 255% gain, Cramer said, the easy money has already been made.
At $40, Cramer said he's taking a pass, but after shares pull back to reasonable levels, he'd be a buyer of this great growth story. Let's check out the latest charts.
In this daily bar chart of SE, below, we can see a generally bullish chart. Prices have been in an uptrend and are trading above the rising 50-day moving average line. Prices are also above the rising 200-day moving average line, which was successfully tested in October. The daily volume pattern shows a bullish increase in November, when prices gapped to the upside and the daily On-Balance-Volume (OBV) line shows an uptrend the past year, signaling more aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is above the zero-line and trying to curve upwards for a fresh outright buy signal.
In this weekly bar chart of SE, below, we can see that prices are up more than three-fold from their base pattern in 2018. Prices are above the rising 40-week moving average line. The weekly OBV line shows a rise in the past year telling us that buyers of SE have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator gave a fresh crossover buy-signal in November, but it is diverging from the price action in that it will, or is, making a lower high, when prices have made a higher high.
In this first Point and Figure chart of SE, below, we used daily data and here a potential price target in the $44-$45 area is projected. Bullish, but not all that far from current levels.
In this second Point and Figure chart of SE, below, we used weekly data and here a potential longer-term price target of $62 is being projected.
Bottom line strategy: With possible targets of $45 and then $62, it may pay to stay long SE. Risk is the key, so only risk a close below $35.