During Monday's Mad Money program Jim Cramer was working on a list of cloud companies that looked worthy of a spot in your portfolio. Cramer said valuations of less than 10 times earnings are reasonable in this environment so Dynatrace Inc. ( DT) made the cut. DT offers a market-leading software intelligence platform, according to its website.
Let's check out the limited price history of DT.
In the daily Japanese candlestick chart of DT, below, we can see that prices have weakened over the two months of trading. In recent sessions we can see lower shadows below $20, suggesting that sellers are rejecting those levels and buyers are pushing prices back up.
The On-Balance-Volume (OBV) line has lost ground the past few weeks telling us that sellers are more aggressive. The 12-day momentum study shows that pace of the decline has slowed a little and that is a small positive.
In this Point and Figure chart of DT, below, we can see the levels to watch going forward. A decline to $19.63 will weaken the picture while a trade at $21.90 will strengthen the picture.
Bottom line strategy: aggressive traders should wait for prices and the OBV line to turn up before buying.
