One caller during the fast-paced Lightning Round segment of Mad Money Monday night asked about the relatively new issue Grocery Outlet Holding Corp. (GO) : "They just reported an unbelievable quarter and I like it," replied Jim Cramer.
Let's look at a couple charts of this seller of mostly close out or seasonal merchandise and food staples.
In the daily bar chart of GO, below, we can see the activity from its IPO in June. Prices initially rallied from around $28 to short of $48 by the middle of August before correcting down to the $30 area in November. Prices are testing the underside of the declining 20-day moving average line and are below the declining 50-day line.
The trading volume is hard to read but what is very interesting is that the daily On-Balance-Volume (OBV) line shows a rise from late June even as prices declined. This movement in the OBV line suggests that buyers have been more aggressive even during a period of price weakness. This is interesting and suggests that prices should move higher.
The 12-day price momentum study shows higher lows the past three months despite prices declining -- this is a bullish divergence and can foreshadow a rally in the days/weeks ahead.
In this Point and Figure chart of GO, below, we can see a $40 upside price target.