In his second "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer spoke with Jim Snee, CEO of Hormel Foods Corp. (HRL) , makers of classic staples like Spam and Skippy peanut butter.
Snee said Hormel is seeing strength across all of its brands amid the coronavirus outbreak. It's not just Hormel, Snee added, the entire U.S. food industry is stepping up production to meet demand and calm consumers' fear of empty shelves.
Snee said that China is returning to normalcy. He said their plants are up and running and are fully staffed and they're seeing a recovery in both retail and food service.
Let's see if the charts of HRL have begun to recover.
In the daily bar chart of HRL, below, we can see that prices gapped lower in late February and declined to the middle of March. In recent days prices have quickly reversed gear and soared to a new 52-week high. Prices were below the declining 50-day moving average line and now they are back above it. Prices were below the slightly rising 200-day moving average line and now they are above it.
The daily On-Balance-Volume (OBV) line declined modestly into a March low but has begun to rise again. The Moving Average Convergence Divergence (MACD) oscillator has turned up and crossed to a cover shorts buy signal.
In the weekly bar chart of HRL, below, we can see that prices are now back above the rising 40-week moving average line. The weekly trading volume has been rising in recent weeks, which is a positive vote by buyers. The weekly OBV line is starting to turn up after about six weeks of decline.
The MACD oscillator has begun to narrow and could soon generate a fresh outright go long signal.
In this Point and Figure chart of HRL, below, we used daily price swings to create the chart. Notice the upside breakout? Here the software is projecting a potential upside price target in the $75 area.
Bottom-line strategy: Someone just showed you a bullish set of charts and indicators. Will you consider going long or will you stay bearish because you see so many other stocks that are weak? It is a market of stocks and not a stock market is the old saying. I would approach HRL from the long side risking below $47.
