Amid all of the market turmoil surrounding tariffs and trade, there's one sector that's held up remarkably well, Jim Cramer told viewers during Wednesday's "Mad Money" program - that's the financial technology sector. Stocks such as Fleetcor Technology (FLT) may not be household names, Cramer said, but that doesn't mean they don't deserve a spot in your portfolio.
What does Fleetcor do? Fleetcor operates in the business-to-business payment space, helping companies manage fuel and travel expenses for their trucking fleets. A company that began as a fuel card business has expanded to include other travel-related expanses, capitalizing on the transition from paper to plastic for many of these types of payments. Due to a series of acquisitions Fleetcor has grown into one of the largest fleet payment networks. That's why Cramer said FLT, which trades for 19x earnings, is a terrific long-term investment.
In the short term, however, there are some concerns. Cramer said Fleetcor still is largely leveraged to trucking, so a slowing economy could dampen growth. Cramer advised being patient and taking a longer-term view of this great growth story. I advise looking at the charts and indicators to see if this a good time to buy FLT.
In this daily bar chart of FLT, below, we can see can see that Fleetcor made a strong rally from December, but that doesn't mean it cannot correct from here. There is even a gap higher in early February, but trading volume does not increase to confirm the price strength.
FLT is above the rising 50-day moving average line, but the line has been tested recently. The 200-day line is also rising. The daily On-Balance-Volume (OBV) line shows a rise from the low in December, but it has turned neutral/flat the past two months. Buyers and sellers are seemingly in balance. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the downside in early March for a take-profits signal and is now close to moving below the zero line for an outright sell signal.
In this weekly bar chart of FLT, below, we can see that prices have nearly doubled from April 2017. There was a good correction in late 2018, but prices soared to new highs this year. FLT is above the rising 40-week moving average line. The weekly OBV line made new highs this year to confirm the price action but made a downward move last month, which could be the start of an important shift. The weekly MACD oscillator is poised for a crossover to a longer-term take-profits signal.
In this Point and Figure chart of FLT, below, the software has projected a downside price target around $225.
Bottom line strategy: The charts are giving us enough reasons to nail down some profits if we are long or to defer purchases if we are flat. Wait for a deeper correction and then stabilization before approaching the long side of FLT.