In his first Executive Decision segment of "Mad Money" Tuesday, host Jim Cramer spoke with Bracken Darrell, CEO of Logitech International (LOGI) , the computer and gaming peripherals maker that delivered quarterly earnings of $1.87 a share when analysts were only looking for 59 cents. Logitech shares rallied nearly 16% Tuesday on the news.
Darrell said sales at Logitech have only gotten stronger as the pandemic continues. Logitech has a long history of making low-cost but high-quality products, he said, and it is applying that legacy to a whole new generation of innovative products.
Turning to the topic of video conferencing, Darrell noted that we are still in the early days of virtual meetings and virtual classrooms. In the beginning, people were doing whatever it took to simply get online. But now, they're getting comfortable with being on video and are outfitting their home offices for the long term.
Let's check and see what is going on with the charts. We reviewed LOGI back on Sept. 8 and looked for a deeper correction to unfold, but that did not materialize and prices were making new highs by the end of the month.
In this updated daily bar chart of LOGI, below, we can see that prices traded sideways earlier this month ahead of the blowout earnings numbers. LOGI gapped higher Tuesday but closed in the middle of the daily high/low range. Prices are above the rising 50-day moving average line and about 50% above the rising 200-day line. The On-Balance-Volume (OBV) line made a new high for the move up as trading volume surged. The Moving Average Convergence Divergence (MACD) oscillator is bullish but not yet at a new high.
In this weekly bar chart of LOGI, below, we can see a bullish picture without the gap on the daily chart. The price action just shows a big rally so far this week. Prices are above the rising 40-week moving average line. The weekly OBV line is super strong and the MACD oscillator has just crossed to the upside for a fresh outright go long signal.
In this daily Point and Figure chart of LOGI, below, we can see Tuesday's rally with all the prices filled in -- no gap. The chart shows an upside price target of $98, which is not all that far away now.
In this weekly Point and Figure chart of LOGI, below, we can see a longer-term price target of $154.
Bottom line strategy: LOGI has surprised on the upside with the fundamental numbers and the technicals. Prices are pointed up but the big question is how do we go long LOGI without risking too much. Aggressive traders could look to buy a dip just below $90, risking below $84. If prices fill more than half of Tuesday's gap they may fill all the gap.
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