In an "Executive Decision" segment of "Mad Money" Wednesday, host Jim Cramer sat down with Zander Lurie, CEO of SVMK Inc. (SVMK) , the parent company of SurveyMonkey.
When SVMK first went public at $12 a share and quickly climbed to $16, Cramer deemed it too expensive. But after falling close to $10 last month and reporting great earnings earlier this week, Cramer wanted to talk to management. He wanted to know: Did the initial public offering give SVMK more publicity?
The IPO was a great opportunity to introduce the enterprise platform to companies, Lurie said. He said companies use SurveyMonkey not only to get feedback from their customers but also from their employees. That's good background on the company, but how does the chart look? Let's check.
In this limited daily bar chart of SVMK, below, we can see the post-IPO decline that was an approximately 50% correction/retracement. Trading volume dried up into the lows, but the daily On-Balance-Volume (OBV) line remained flat or steady the past five to six weeks. Sellers were not pressuring the market. In the lower panel is the 12-day price momentum study, which shows higher lows and thus a slowing of the decline. This is a bullish divergence when compared to the price action and may foreshadow further gains ahead.
In this limited Point and Figure chart of SVMK, below, we can see a minor upside breakout at $12.50. A decline to $10.50 would be bearish.
Bottom line strategy: it looks like SVMK made a low in late October. For some traders this might be enough to probe the long side, but I would like to see more price action and a rising OBV line before I make a buy recommendation.