For his second "Executive Decision" segment of Mad Money Monday evening, Jim Cramer also spoke with Martin Richenhagen, the outgoing chairman, president and CEO of agriculture equipment maker AGCO Corp. (AGCO) .
Richenhagen credited AGCO's success with having the right products, the right innovations and the right culture. The company's products include tractors, combines, sprayers and more.
We have not reviewed AGCO's charts since the bottom earlier this year when we wrote that, "The picture for AGCO is mixed. We have a bullish Point and Figure chart but the damage on the weekly chart is not going to be repaired so quickly. I would avoid the long side of AGCO and look for stocks where an upside move looks more certain." AGCO needed several weeks before starting to rally in late May.
Let's check out the charts of AGCO again this morning.
In the updated daily bar chart of AGCO, below, we can see that the stock has made several corrections and pullbacks as it traded higher. The rising 50-day moving average line was very effective and has identified several buying opportunities. The slope of the 200-day moving average line did not turn bullish until October.
The On-Balance-Volume (OBV) line finally bottomed in May and climbed higher to November before dipping into early December. A new move up in the OBV line looks like it has started. The Moving Average Convergence Divergence (MACD) oscillator has just crossed upward for a fresh outright buy signal.
In the weekly bar chart of AGCO, below, we see a constructive-looking chart and indicators. Prices are in an uptrend and above the rising 40-week moving average line. The weekly OBV line has been in an uptrend from April and the MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of AGCO, below, we can see a potential price target in the $137 area.
Bottom-line strategy: AGCO longs could raise stop protection to $95. Use a shallow dip to add to longs or start a new position. The $137 area is our price objective for now.