Jim Cramer tells Real Money readers with the pandemic raging out of control, destroying both lives and our economy, it seems unfathomable that the stock market is hitting new highs. But the top two best-performing stocks in the S&P 500 Thursday were Accenture (ACN) and Lennar (LEN) , and when you examine why, Cramer says the euphoria makes perfect sense.
Let's focus on Accenture. ACN rallied 6.8% Thursday after the company reported earnings that included bookings up a monster 25%. The company also bought back 3.3 million shares of its own stock and boosted its dividend by 10%.
In its conference call, Accenture said companies are desperate to digitize and need their help to make it happen. Cramer said Accenture is locked into a secular trend and remains a buy.
Let's review the charts.
In the daily bar chart of ACN, below, we can see that the shares have nearly doubled from their March nadir. Prices gapped higher Thursday on heavy turnover. ACN is trading above the rising 50-day moving average line and the bullish 200-day moving average line.
The daily On-Balance-Volume (OBV) line is bullish and its strength confirms and supports the price gains this year. The Moving Average Convergence Divergence (MACD) oscillator is also bullish.
In the three-year weekly bar chart of ACN, below, we can see that prices have made a strong rally punctuated by a couple corrections along the way. The shares are trading above the rising 40-week moving average line.
The weekly OBV line is bullish and close to making its own new record high. The MACD oscillator is bullish again from November.
In this daily Point and Figure chart of ACN, below, we can see a potential upside price target of $311.
In this weekly Point and Figure chart of ACN, below, we can see a tentative longer-term price objective in the $421 area. Impressive.
Bottom-line strategy: The upside gap on ACN is impressive and should open the way to further gains. The shares could pull back a bit in the short-run and that could be used to build a long position. Risk below $240 for now. The $300-$311 area is our first price target.