In Wednesday's Lightning Round segment of "Mad Money," one caller asked Jim Cramer about Hyliion Holdings Corp. (HYLN) . "I wouldn't sell it here. I think you'll get a bounce" was Cramer's advice about the company that produces electrified powertrain systems that can augment or replace traditional diesel- or natural gas-fueled powertrains, according to the company website.
Let's check out the charts of Hyliion again. We looked at HYLN last Oct. 16 and wrote at that time, "The fundamental story behind HYLN may be constructive but the charts right now show no sign of a bottom. Avoid the long side and let someone else show us the way." With hindsight our advice seemed pretty good.
In this updated daily bar chart of HYLN, below, we see a bearish picture. Prices are in a downtrend, trading below the declining 50-day moving average line and the bearish 200-day line. Notice the sideways movement around $15 before the most recent decline; this area was support and will likely reverse rolls to act as resistance. The On-Balance-Volume (OBV) line shows a decline from early October, telling us that sellers of HYLN have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in bearish territory and pointed lower. A cover shorts buy signal does not look imminent.
In this weekly bar chart of HYLN, below, we also see a bearish picture. The only positive I see below is that the high/low range of the weekly bars has gotten smaller, which suggests that traders are not pressing the downside as aggressively. A small range for a bar can mean that an outside day or week becomes easier to happen.
In this daily Point and Figure chart of HYLN, below, we can see that prices have been in a downtrend and have reached and exceeded a downside price target of $14. A trade at $15 is needed to show some improvement on this chart.
Bottom line strategy: Can HYLN bounce? Maybe longs will get a better selling opportunity, but the $15 area is probably going to be stiff resistance so that area will need to be overcome to see any meaningful bounce.
