For his "Executive Decision" segment of Mad Money Thursday night, Jim Cramer spoke with Cord Christensen, chairman and CEO of PetIQ Inc. (PETQ) , the pet health provider that just posted a 35-cents-a-share earnings beat.
Christensen said the company continues to expand their partnerships with major retailers and they also continue to grow their commerce business, which rose 402% in 2018. He explained that PetIQ's mantra is to "follow the pets," and since most pet food comes from large retailers, that's the best place for PetIQ clinics. Most pets still don't receive adequate health care, Christensen said, and PetIQ is trying to change that.
When asked about competition from Chewy Inc. (CHWY) , another big name in the pet care space, Christensen said that the two companies are aligned in their mission and work together. When asked for an update on their Perrigo Animal Health acquisition, he said the $185 million deal is going well and is exactly as they expected.
Let's see what the charts and indicators are doing and how they are aligned.
In the daily bar chart of PETQ, below, we can see a decline followed by a base pattern and a breakout and retest all in the past twelve months. Traders relying on moving average crossovers have probably been discouraged. Today prices are above the rising 50-day moving average line and the flat 200-day line. The 50-day line crossed above the 200-day line last month for a bullish golden cross.
The volume data is hard to interpret but the On-Balance-Volume (OBV) line shows a rise from late December telling us that buyers of PETQ have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has mostly been trading sideways around the zero line but it looks like it will turn up in the days ahead.
In this weekly bar chart of PETQ, below, we can see how prices are above the flat 40-week average line. The weekly OBV line has been neutral the past twelve months and the weekly MACD oscillator is more bullish than the daily indicator.
In this Point and Figure chart of PETQ, below, we can see an upside price target of $44 being projected.
Bottom-line strategy: The chart of PETQ shows some sharp but temporary downward reactions so risk and discipline are important here. Go long above $36 but be able to afford a close below $31 now as a stop point. The $44 area is the first upside price target.