For his final Executive Decision segment of "Mad Money" Thursday, Jim Cramer checked in with Rowan Trollope, CEO of Five9 Inc. (FIVN) , the call center software provider that now trades for $10 less than last week, when it reported strong earnings.
Trollope said Five9 is at the right place at the right time, and when the pandemic hit cloud software providers were the big winners from the work-from-home trend. He said their enterprise market grew by 33% in the quarter.
Trollope also noted Five9's recent partnership with AT&T (T) as a big win. He said the exclusive deal is moving very quickly to bring new customers to the Five9 platform.
We last looked at FIVN back on May 20 and wrote at that time, "We have recommended the long side of FIVN in the past and we find reasons to do it again. Traders could buy FIVN at current levels or on strength above $109. Either way risk a close below $100. $124 is our first price target." With prices reaching and exceeding our $124 price target a fresh look at the charts is needed, so let's check them out to see what investors may want.
In this daily bar chart of FIVN, below, we can see that prices have been bouncing off the rising 50-day moving average line since early June. The 200-day moving average line is also rising but a bit below the market. The On-Balance-Volume (OBV) line has been strong since late March and confirms the price strength to date. The Moving Average Convergence Divergence (MACD) oscillator has made lower highs since May and has diverged from the price action. The strength of the trend has been weakening and this could foreshadow a period of sideways to lower price action.
In this weekly bar chart of FIVN, below, we can see that investors have had a nice ride higher the past three years. Prices are above the rising 40-week moving average line, so we know that the longer-term trend is up. The OBV line has been rising the past three years, which is positive. The OBV line has stalled a little recently and that might mean that investors with big gains may be taking some profits. The MACD oscillator has been bullish the past three years but we might see a take profit sell signal in the weeks ahead.
In this daily Point and Figure chart of FIVN, below, we can see a price target in the $177 area projected.
Bottom line strategy: The charts and indicators suggest that FIVN could trade sideways for a few weeks. Short-term traders might book profits while patient investors could continue to hold longs with stops on a close below $100. The $177 area is our longer-term price objective.
