In his "No-Huddle Offense" segment of "Mad Money" on Tuesday night, Jim Cramer said a good trader is like a good therapist, always judging the emotions of the markets.
Today, the market's mood was forgiving -- and that's how Cracker Barrel Old Country Store (CBRL) rallied 1.8%. The markets are forgiving companies like CBRL and others, Cramer said, and that's why they remain a buy.
Let's visit the CBRL charts while we sit on the porch.
In the CBRL daily bar chart below, we see a mostly sideways/neutral price chart with bullish indicators. Prices in the past 11 months have traded in a wide $150 to $185 range. CBRL has crossed above and below the 50-day and 200-day moving averages, but it is currently testing both lines and looks as if it soon will close above them.
The On-Balance-Volume (OBV) line for the past 12 months shows a rising pattern, with a recent new high for the move up. The strength in the OBV line may be foreshadowing price strength as this sign of aggressive buying often does.
The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside last month for a cover-shorts buy signal, and the indicator is now close to the zero line, for a possible outright buy signal.
In the weekly bar chart of CBRL, shown below, we went back to late 2015 to show the choppy trading pattern of this stock. The pattern of higher lows and higher highs was interrupted in July of this year when CBRL did not make a new high. Prices are trading around the 40-week moving average line.
The weekly OBV line shows an equally choppy pattern without making new highs. The MACD oscillator is above the zero line but it could turn up or down depending on the price activity ahead.
In this Point and Figure chart of CBRL, below, we can see a rising pattern of lows and that a trade at $176.97 and $178.74 will be big upside breakouts. A $197.45 price target is being projected.
Bottom line strategy: The rising OBV line on the daily bar chart is probably the most bullish clue for CBRL. I would approach CBRL from the long side, risking a close below $158. Add to longs above $178 and $180.