Shares of Chegg Inc. (CHGG) rallied strongly last Friday on news of an additional big buyback authorization. Let's check out the charts of this online learning service and app.
In our last review of CHGG on May 3, when a number of sell side firms cut their rating on the stock, we were bearish. Have things changed?
In this daily bar chart of CHGG, below, we can see that prices gapped lower in early May but have been finding some buying interest (support) in the $20-$15 area. CHGG is still trading below the popular moving averages, but the On-Balance-Volume (OBV) line has crept higher from early May and the Moving Average Convergence Divergence (MACD) oscillator has improved.
In this weekly Japanese candlestick chart of CHGG, below, we can see some lower shadows when we look closely at the chart. Lower shadows tell us that traders are rejecting the lows. The weekly OBV line shows some improvement from early May and the MACD oscillator continues to move toward the zero line.
In this daily Point and Figure chart of CHGG, below, we can see an upside price target in the $23 area.
e In this weekly Point and Figure chart of CHGG, below, we see a downside price target in the $12 area.
Bottom line strategy: The charts and indicators of CHGG have improved from early May. Aggressive traders looking for a short-term trade could go long CHGG at current levels, risking to $15 and looking for a rebound into the $23-$30 area.
