During Friday's Mad Money program Jim Cramer told viewers that this Wednesday he would be monitoring earnings results from tech companies such as Shopify Inc. (SHOP) , Twilio (TWLO) as well as savoring the hops and numbers from Boston Beer Co. (SAM) a stock where he urged viewers to not overstay their welcome.
Let's skip the trip to the package store and check out the charts of SAM.
In the daily bar chart of SAM, below, we can see that the shares broke out over the highs of October and November. Normally this sort of upside breakout would be very bullish but there is no expansion of volume. This is not normal and can be a heads up that we might be looking at a bull trap formation.
What is a bull trap you ask? Prices break out on the upside from a trading range. The news appears to be bullish and prices rise on short-covering and new buying, however, prices quickly reverse direction and break down below the prior trading range thus trapping the bulls with bad or unprofitable positions. Prices have not (yet) reversed to the downside but maybe earnings will do it.
The On-Balance-Volume (OBV) line has been flat/neutral for months and tells us that there is a balance between buyers and sellers. The Moving Average Convergence Divergence (MACD) oscillator is bullish but has narrowed in recent sessions. A narrowing in the oscillator suggests that the trend strength is weakening.