In his Executive Decision segment of "Mad Money" Thursday, Jim Cramer spoke with Andy Paul, co-founder and CEO of Corsair Gaming (CRSR) , a maker of high-end gaming peripherals.
Paul noted that while the number of gamers has increased from 3% to 4% every year over the past few years, gaming hardware has grown by 24%, on average. Paul added that if you think about gaming as a hobby or a sport, no one buys just one set of golf clubs or one set of skis. The same applies to gaming.
Let's check on the charts and indicators of Corsair Gaming.
In this daily bar chart of CRSR we can see that prices made an impressive rally back in November when the company went public. Since that initial surge the charts have weakened. Rallies are not long sustained and prices have been making lower lows. CRSR is trading below the declining 50-day moving average line and the just-started 200-day moving average line. The On-Balance-Volume (OBV) line shows limited strength, telling us that buyers of CRSR have not been committed for long. The Moving Average Convergence Divergence (MACD) oscillator has recently slipped below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of CRSR, below, we see a bearish picture. Prices have pushed down to a new low close without lower shadows, telling us that traders are rejecting the lows. This suggests further declines are possible. The OBV line is particularly weak and weaker than the daily line. The MACD oscillator is pointed down.
In this daily Point and Figure chart of CRSR, below, we can see a downside price target of $28 or so.
In this weekly Point and Figure chart of CRSR, below, we can see a lower price target in the $26 area.
Bottom line strategy: Gaming may be big business, but the charts of CRSR are not getting the message. Avoid the long side of CRSR for now.