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  1. Home
  2. / Investing

Sail With Sea Limited -- but Know the Risks

The charts and indicators show possible targets that could wash up good returns, so it may pay to stay long SE.
By BRUCE KAMICH
Jan 09, 2020 | 01:02 PM EST
Stocks quotes in this article: SE

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.

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TAGS: Investing | Technical Analysis | E-Commerce | Gaming | Mad Money

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