In his first Executive Decision segment of Tuesday's "Mad Money" program, Jim Cramer spoke with Chris Kendall, president and CEO of Denbury Inc. (DEN) , an oil and natural gas producer that is leading the charge to develop carbon capture and storage technologies.
Kendall said Denbury is in the business of enhanced oil recovery, which injects carbon dioxide into oil wells to retrieve previously unrecoverable oil. As a part of that process, his company has been able to capture and store one million tons of carbon dioxide deep underground.
Carbon capture technology can have a big impact on climate change, according to Kendall, who said its impact is second only to wind and solar technologies. He said the best thing about carbon capture is that it's available today and doesn't require a technological leap to scale.
Cramer said Denbury should be a lesson for the entire oil industry that you can drill for oil and still do good things for the environment.
Let's check and see if the charts of Denbury can do good things for investors.
In this daily bar chart of DEN, below, we can see that prices made a strong rally into late June. Prices have been correcting those gains with buying interest (support) coming in around $60. DEN is testing the underside of the cresting 50-day moving average line and trades above the rising 200-day line. The On-Balance-Volume (OBV) line rose into late June to confirm the price gains but then turned flat or neutral. A rise in the OBV line could foreshadow fresh price gains. The Moving Average Convergence Divergence (MACD) oscillator is crossing to a cover shorts buy signal and sits just below the zero line.
In this weekly Japanese candlestick chart of DEN, below, we see some small lower shadows in July and August. These lower shadows are not particularly long or dramatic but they hint that traders are rejecting the lows and I consider that a plus. The OBV line shows a small decline and the MACD oscillator is in a take profit sell mode.
In this daily Point and Figure chart of DEN, below, we can see that the software is projecting a downside price target in the $49 area. A trade at $73.73 is probably needed to improve this picture.
In this weekly close-only Point and Figure chart of DEN, below, we can see a $55 price target.
Bottom line strategy: Two of our charts suggest that DEN is having a normal correction while the other two charts point to further declines. Let's wait and see some further price action before probing the long side.