For his final "Executive Decision" segment on Mad Money, Jim Cramer checked in Jonathan Webb, founder and CEO of AppHarvest (APPH) , the sustainable farming company that recently came public via a reverse merger with a special purpose acquisition company (SPAC).
Webb said that it is well known the U.S. has problems with its food supply. Most of our fruits and vegetables are grown in Mexico. In many cases, these items are genetically modified so they can better survive their journey, he said.
The best place to grow fruits and vegetables is in your own backyard, Webb said, but the next best place is AppHarvest, located in Kentucky. Using sustainable techniques, AppHarvest is growing 30 times more per acre than traditional farming, the company says. The company is only one day's drive from most major markets.
We don't have a lot of trading history but let's take a look at the charts.
In the daily Japanese candlestick chart of APPH, below, we can see that the shares soared for a four-fold increase in a little more than three months. Prices peaked in early February and have since declined. Using shorter moving averages we see that prices are below both the declining 20-day moving average line and below the rising 50-day line.
The On-Balance-Volume (OBV) line shows weakness from February as traders switched from aggressive buying to aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator fell below the zero line last month for an outright sell signal.
In this daily Point and Figure chart of APPH, below, we can see that prices have reached a downside price target of $22.
Bottom-line strategy: APPH could see a sideways to lower trading range for the weeks ahead. A $25 to $14 range is what I would expect. Let's watch and see if investors hammer out a bottom pattern. In the meantime I plan on looking for their tomatoes in my local Walmart (WMT) . Some Peter Lynch investigation.
