In his second "Executive Decision" segment of Mad Money Thursday night, Jim Cramer sat down with Steve MacMillan, president and CEO of Hologic Inc. (HOLX) , the medical equipment maker with shares up 24% for the year.
MacMillan explained that Hologic's 3D mammography and cervical products are designed to detect cancers earlier, so patients get better outcomes and the health care system overall saves money. He said capital spending at hospitals remains strong, especially if you have a meaningful product like 3D imaging that provides state-of-the-art results.
Let's check out the charts and indicators of HOLX to see what investors are doing.
In the daily bar chart of HOLX, below, we can see that prices have moved up so far this year but not without a number of retracements or corrections along the way. HOLX is currently above the rising 50-day moving average line and the bullish 200-day line.
The On-Balance-Volume (OBV) line has been going higher since early January and its rise tells us that buyers of HOLX have been more aggressive with more volume being traded on days when the stock has closed higher.
The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside two weeks ago for a fresh go long signal.
In the weekly bar chart of HOLX, below, we can see that prices are above the rising 40-week moving average line. The line was successfully tested twice this year. The weekly trading volume and the OBV line are not confirming the rally however. Trading volume has declined and the OBV line on this time frame has been neutral and diverging from the price movement.
The MACD oscillator has turned up to a new buy signal.
In this Point and Figure chart of HOLX, below, we can see an upside price target of $62 being projected. A trade at $52.57 would refresh the uptrend.
Bottom-line strategy: HOLX could get buffeted with weakness in the averages but if the stock does not close below $47 I would favor the upside.
