In the fast-paced "Lightning Round" of the Mad Money program Thursday night, Jim Cramer was bearish on Innovative Industrial Properties (IIPR) . Let's check out the charts to see where we would cut and run.
In the daily bar chart of IIPR, below, we can see that prices have doubled in the past year. Prices are above the rising 50-day moving average line as well as the rising 200-day line.
The daily On-Balance-Volume (OBV) line shows a rise from February to late September and since then it has diverged from the price action. IIPR made new highs in November but the OBV line has not. This difference or divergence is a sign that buyers of IIPR have been less aggressive and thus have not confirmed the new price highs.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the downside in November for a take profits sell signal.
In the weekly bar chart of IIPR, below, we have about two years of history to work with. Prices are above the rising 40-week moving average line.
The weekly OBV line is pointed up but is has not broken above the November peak.
The weekly MACD oscillator is above the zero line but it has started to narrow and could soon generate a take profits sell signal.
In this Point and Figure chart of IIPR, below, we can see an upside price target of $62 and we can see that a decline to $48 or worse $46 will weaken the chart.
Bottom-line strategy: IIPR is still in an uptrend with a $62 price target but a decline to $48 or $46 will weaken the picture. Hold longs but liquidate positions on a close below $46.