In his "Homework" segment of "Mad Money" Wednesday, Jim Cramer followed up on a few stocks that had stumped him during earlier shows. Jim said he likes the story at CareDx Inc. (CDNA) , a molecular diagnostics company, but that investors need to wait for a pullback in this speculative stock after it rallied 212% in the last 12 months. Let's check out the charts to see where and when we might go long.
In this daily bar chart of CDNA, below, we can see a strong uptrend with a number of consolidations and pullbacks giving traders and investors several buying opportunities along the way. CDNA is knocking on a new high and trading above the rising 50-day moving average line. The 200-day average line is rising, and dips toward the line in December and April have turned out to be buying opportunities.
The volume pattern is rough, but the On-Balance-Volume (OBV) line shows a rise the past 12 months to support/confirm the price advance. The Moving Average Convergence Divergence (MACD) oscillator is turning up from above the zero line for a fresh outright go-long signal.
In this weekly bar chart of CDNA, below, we can see prices go from the penny stock area to $40 -- very, very impressive. Tests of the rising 40-week moving average line provided several buying opportunities along the way. The rising weekly OBV line is bullish and the MACD oscillator is in a bullish configuration.
In this Point and Figure chart of CDNA, below, we can see a possible $53 price target.
Bottom line strategy: All the charts above look bullish. Traders could go long at current levels and on strength. The mid-$50's is the price target and traders should use a close below $32 as their risk point.