For his "Executive Decision" segment of Mad Money, Jim Cramer spoke with Jim Chirico, president and CEO of Avaya Holdings Corp. (AVYA) , the communications' provider that reported strong earnings last week.
Chirico had positive things to say about his company's recent partnership with RingCentral Inc. (RNG) . Avaya is also a leader in work-from-home communication systems. He said they provide an entire suite of services for businesses and large enterprises, complete with the security and management tools businesses require.
Let's check out the charts of AVYA.
In the daily bar chart of AVYA, below, we can see that prices have rallied into the $14-$15 area several times since August and every time prices were turned back down. Prices now look to be in a stronger technical position than all of the prior attempts. AVYA is above the rising 200-day moving average line and above the bottoming 50-day moving average line.
Trading volume has come in spurts the past year but the On-Balance-Volume (OBV) line has recently made a new high and has broken above the February peak. The OBV line was invented by the late Joseph Granville and can often lead prices up and down.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line earlier this month for an outright buy signal.
In the weekly bar chart of AVYA, below, we can see that we do not yet have three years of price history. Nevertheless, the picture below is improving. Prices are above the bottoming 40-week moving average line.
The weekly OBV line has turned upward and the MACD oscillator on this longer time frame has crossed to a cover shorts buy signal.
In this daily Point and Figure chart of AVYA, below, we can see a potential upside price target in the $23 area.
Bottom-line strategy: Risking a close below $12 traders could go long AVYA at current levels and look to add to longs above $15. Our initial upside price target is $23.
