During the Mad Money program host Jim Cramer makes time for callers to ask about securities they are interested in. Thursday night one caller asked about InMode Ltd. (INMD) : "I like this one. This is in the sweet spot," said Cramer.
InMode makes a skin rejuvenation device I could use about now, but let's look at the charts first.
In the daily candlestick chart of INMD, below, we can see prices had an initial rally into a November high followed by two declines bringing prices back down to around their IPO price. Prices are below the declining 20-day and 50-day moving average lines.
The On-Balance-Volume (OBV) line is pointed down telling us that sellers of INMD have been more aggressive. The 12-day price momentum study is showing lower lows, which tells us that the pace of the recent decline has not yet slowed down. Prices could be making a low now but I am not getting any positive clues to support that theory.
In this Point and Figure chart of INMD, below, we can see that prices have reached and exceeded the downside price target of $37. There are no signs yet of accumulation.
Bottom-line strategy: There is a saying that if you don't attack you will never earn a Navy Cross, but if you don't see a base pattern you probably won't buy a stock too soon. I would wait before buying INMD.