At Home Group's Recent Correction Makes Going Long Feel Right at Home

The home décor retailer's charts indicate gains in its shares could be ahead.

During the popular Lightning Round segment of "Mad Money" Monday, one caller asked host Jim Cramer about At Home Group Inc. (HOME) : "The stock is up big and they tell a compelling story. Buy some around $14 or $15 a share," Cramer said. Let's check out the charts and indicators of this home décor superstore.

In this daily bar chart of HOME, below, we can see that prices have climbed sharply from lows around $2 back in March and April. HOME is trading above the rising 50-day moving average line and the rising 200-day moving average line. We can see a bullish golden cross of these two lagging indicators in the middle of July. Trading volume has been increasing since late February as more investors and traders have been attracted to the company and its story.

The On-Balance-Volume (OBV) line has been rising since late April and tells us that buyers of HOME have been more aggressive for several months. The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in May for a buy signal but is currently in a take profits sell mode. 

 

 

 

In this weekly bar chart of HOME, below, we can see that prices were in a long two-year decline from 2018 to 2020. Prices have recovered and are above the rising 40-week moving average line. The weekly OBV line has been strong since April and the MACD oscillator is bullish in this longer time frame. 

 

 

 

In this daily Point and Figure chart of HOME, below, we can see that the software is projecting a potential upside price target in the $22 area. 

 

 

In this weekly Point and Figure chart of HOME, below, we can see a potential $47 price target. 

 

 

 

 

Bottom line strategy: I agree with Cramer and would look to go long HOME around $16-$15, risking a close below $13. 

Employees of TheStreet are prohibited from trading individual securities.