For his final "Executive Decision" segment of Monday's Mad Money program, Jim Cramer checked in Robert Kramer, President and CEO of Emergent BioSolutions (EBS) , the contract manufacturer that's seen its shares plunge $40 from their August highs. EBS shares rose 1.7% Monday, however, after the company presented at the J.P. Morgan Healthcare Conference.
Kramer explained that Emergent provides several different services, from devices to therapeutics to contract development to packaging for companies big and small.
When asked about Warp Speed, Kramer was positive on the public-private partnership program. He said it combined both science and manufacturing expertise and allowed millions of vaccine doses to be produced "at risk" before final approvals were granted. Once the vaccines received approval, they were immediately made available.
We looked at the charts of EBS on Monday and wrote that, "EBS might see a sideways $105 to $85 trading range for the next several weeks. This will be a good base for renewed gains. Investors should look to be buyers in the lower end of this expected trading range in the second half of the first quarter. Risk a close below $80."
Let's check on the charts again Tuesday morning to see if anything changed and if our strategy is still good.
In the updated daily bar chart of EBS, below, we can see that the shares have edged up toward the upper end of our anticipated $105-$85 trading range. EBS is poised to make a new high for the move up. This development could embolden longs and precipitate more aggressive buying. Strength beyond $105 could mean our expectations for a sideways range is history.
In this updated daily Point and Figure chart of EBS, below, we used a traditional even-dollar scaling method. Here a trade at $104 will be a double-top breakout and could open the way to further gains. A price target of $128 is being projected.
Bottom-line strategy: I used to keep a quote on my desk in my job as a commodity broker: "Calling the market is easy. Getting it to answer is hard." EBS is looking stronger Tuesday morning than just 24 hours ago.