One caller during Friday's Lightning Round segment of Mad Money asked host Jim Cramer about ZIM Integrated Shipping (ZIM) . "I think this stock is overdone. Why not buy Union Pacific (UNP) instead?" was Cramer's response.
Let's check out the charts.
In this daily bar chart of ZIM, below, we see a fairly negative picture with the trading we have so far. Prices are below the declining 20-day and 50-day moving average lines.
The daily On-Balance-Volume (OBV) line is weakening and the Moving Average Convergence Divergence (MACD) oscillator is bearish. Not what we want to see to recommend purchase.
In this daily bar chart of UNP, below, we can see that the shares have improved over the past 12 months. UNP is trading between the declining 50-day moving average line but just above the rising 200-day line.
The On-Balance-Volume (OBV) line has been steady/neutral all year. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in sell territory.
In this weekly Japanese candlestick chart of UNP, below, we see some positive clues. Prices look like they have made a successful test to the rising 40-week moving average line.
Trading volume is steady and the weekly OBV line is steady. The MACD oscillator has been weak since October.
In this daily Point and Figure chart of UNP, below, we can see a nearby price target in the $206 area.
In this weekly Point and Figure chart of UNP, below, we used close-only price data and a five-box reversal filter. Here the software projects a $381 price target.
Bottom-line strategy: The chart of ZIM shows more risk while the charts of UNP show us more upside potential after the possibility of some short-term price weakness.
(UNP is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells this stock? Learn more now.)
