Camping World's Charts Are a Breath of Fresh Air

Is this stock in the 'sweet spot'?

During the fast-paced Lightning Round segment of Mad Money Tuesday night one caller asked Jim Cramer about Camping World Holdings (CWH) . "They are in the sweet spot. I'm a fan," replied Cramer.

We looked at CWH back on June 19 writing that, "Prices look extended when compared to the 200-day moving average line and the pace of the advance has been slowing recently. This tells me to be cautious about new longs. Longer-term we could see further gains to the $39 area. I would feel more comfortable buying CWH around $20 than at current levels."

CWH rallied to $42 passing our $39 price target before correcting to the downside for most of August.

Let's check and see how the charts look today.

In the updated daily bar chart of CWH, below, we can see that the shares made a huge run from March to early August. A correction has been unfolding from the August zenith and it looks like it has just about run its course. Prices are back above the cresting 50-day moving average line. The 200-day moving average line has a positive slope and intersects below $20.

The On-Balance-Volume (OBV) line has followed the price action with strength from March to early August and then some weakness. The OBV line looks like it has been stable the past week or so and it could be ready for a new move higher. A rising OBV line would be a constructive development.

The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but poised to cross to the upside for a cover shorts buy signal and maybe an outright go long signal at the same time. 

 

In the weekly bar chart of CWH, below, we can see a picture that could soon start to improve. Prices are trading above the rising 40-week moving average line. The weekly OBV line has moved sideways for two to three months but it has not turned lower and I take that as positive development.

 

The MACD oscillator is above the zero line but it has narrowed sharply to the point that it will either cross to the downside for a take profits sell signal or widen back out if prices resume their advance. 

 

 

In this Point and Figure chart of CWH, below, we used daily price data to construct the chart. The charting software is projecting the $47 area as a potential upside price target. 

 

 

 

 

Bottom-line strategy: New longs could be started at current levels risking a close below $26 now. The $47 area is our new upside price objective.

 

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