During the Lightning Round of Mad Money Monday night one caller asked Cramer about SunPower (SPWR) . "It's had a big run but do not sell it. It will do well in the future," replied Cramer.
Let's check and see how the charts and indicators look.
In the daily bar chart of SPWR, below, we can see that the shares made a base around $4 and prices broke out on the upside in June/July and have turned parabolic. SPWR is trading above the rising 50-day moving average line and above the rising 200-day line. Prices are more than twice the 200-day line so they are considered extended or overbought.
The On-Balance-Volume (OBV) has been rising since early June and tells us that buyers of SPWR have been more aggressive. The OBV line looks like it is leveling off in the past few weeks. This could mean that there is more of a balance between buyers and sellers.
The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since June but the two moving averages that make up this indicator are very close together so we could have a new signal soon.
In this weekly bar chart of SPWR, below, we can see that prices have rallied strongly from the base pattern around $4 or so. If you bought the extreme lows you may have a ten-bagger on your hands. Well done. Prices are above the rising 40-week moving average line.
The MACD oscillator is bullish and the OBV line is pointed up but it has not yet made a new high like prices have done.
In this daily Point and Figure chart of SPWR, below, we can see a potential price target of $35 -- not all that far away.
In this Point and Figure chart of SPWR, below, we used weekly close-only prices and a traditional even-dollar scaling. Here the software is suggesting a long-term price target in the $131 area.
Bottom-line strategy: SPWR is extended above the 200-day line and the 40-week average. A period of sideways to lower price action could develop during the first quarter. Longer-term, we have a Point and Figure target in the $130 area. Be patient before looking to add to existing longs or before entering into a new long position.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
