In his Executive Decision segment of "Mad Money" Tuesday, host Jim Cramer spoke with Scott Wine, CEO of CNH Industrial NV (CNHI) , a machinery maker that this week announced the planned acquisition of Raven Industries (RAVN) for $2.1 billion.
Wine said in today's market farmers need productivity, and precision farming with high-tech equipment is how to get that done. That's why CNH, along with Raven, will be able to offer farmers a full assortment of precision equipment, including autonomous vehicles.
Wine also commented on CNH's partnership with the troubled Nikola Corp. (NKLA) . He said while there's no denying the company's past troubles, the CNH partnership is a good one and Nikola is helping to advance their technology.
CNH is also in the process of separating its on-highway and off-highway products to better allow each business to follow its own trajectory, Wine said.
Let's check out the charts and indicators.
In this daily bar chart of CNHI, below, we can see that prices have more than doubled in the past 12 months. Prices are testing the rising 50-day moving average line. The slope of the slower-to-react 200-day moving average is positive and intersects around $13. The trading volume has been increasing since September and that is a positive sign for old chart readers like myself. The On-Balance-Volume (OBV) line shows a rise the past year to confirm and support the price advance. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been weakening since January and is pointed down toward the zero line and a potential outright sell signal.
In this weekly Japanese candlestick chart of CNHI, below, we can see a bearish engulfing pattern at the beginning of June to mark a top reversal. A long red candle confirms the pattern. Prices could trade sideways or lower from here. The slope of the 40-week moving average is positive and the line intersects around $13.50 or so. The weekly OBV line stalled in May. The MACD oscillator has crossed to the downside for a take profit sell signal.
In this daily Point and Figure chart of CNHI, below, we can see a potential price target in the $41 area.
In this long-term bar chart of CNHI, below, we can see that prices are coming out of a lengthy base pattern. The height of the base projects to the $35-$40 area.
Bottom line strategy: If you look at a long-term chart of CNHI (above) you can see that it is just about ready to make a breakout from a 20-year base. A strong weekly close above the highs of 2008 should not be ignored, but until that happens traders are likely to endure a period of sideways price action. Prepare to become a buyer.
