For his final Executive Decision segment of "Mad Money" Monday, Jim Cramer sat down with Ajei Gopal, president and CEO of Ansys Inc. (ANSS) , a simulation software company with shares that are up 37% for the year to date.
Gopal said whether you are building a microchip or a rocket ship, you need the ability to design, test and validate your products and that's what Ansys allows companies to do. They allow designs to get to market faster, cost less money and be more efficient. Gopal noted that it takes eight billion miles to validate an autonomous car system, for example, and that's simply impossible to do in the real world. But with simulation, companies can test thousands of cars at the same time.
Simulations and testing are no longer just at the end of the design process, Gopal said. These technologies are taught in undergraduate engineering programs and are used throughout the process, from prototypes to final designs. Let's check out some real charts and not simulations.
In this daily bar chart of ANSS, below, we can see that prices made a lopsided double bottom with lows in October and late December/early January. Prices since have rallied strongly to best the September peaks. ANSS is above the rising 50-day average line as well as the rising 200-day average. In March we can see a bullish golden cross of these two popular moving averages.
The volume pattern from early December looks like volume is decreasing, which should be a warning signal to bulls, but the daily On-Balance-Volume (OBV) line has been increasing from late October and suggests that buyers of ANSS have been more aggressive for months. The Moving Average Convergence Divergence (MACD) oscillator was declining from February but it recently turned up to a cover-shorts buy signal.
In this weekly bar chart of ANSS, below, we can see a strong rise over the past three years. Prices are back above the rising 40-week moving average line. The weekly OBV line shows a positive trend the past three years interrupted by a couple pullbacks. The MACD oscillator narrowed in April and May but could be crossing back to the upside soon.
In this Point and Figure chart of ANSS, below, we can see a tentative upside price target of $248 projected.
Bottom line strategy: Traders should try to go long ANSS below $200 and risk below $176. The $250 area is our longer-term price target.