During Friday's Mad Money program host Jim Cramer told viewers that on Tuesday, he'll be watching the action of drone-maker AeroVironment (AVAV) .
We have not reviewed the charts of AVAV since July 2, 2019, so let's check in again and see what has changed.
In the updated daily bar chart of AVAV, below, we can see that the shares had problems sustaining an uptrend until October 2020. Prices rallied into a small double top in January/February and then AVA corrected sideways to lower. Prices have crossed back and forth around the flat 50-day moving average line. The 200-day moving average line has a positive slope and intersects around $100.
The On-Balance-Volume (OBV) line shows a peak in February and its decline tells us that sellers of AVAV have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is just slightly above the zero line. Not much in the way of trend strength.
In the weekly Japanese candlestick chart of AVAV, below, we can see that prices made a base pattern back in 2019 and 2020. Prices broke out the upside in late 2020 and doubled in just a few months. AVAV topped out in February/March but remains above the rising 40-week moving average line.
The weekly OBV line has declined from February but shows some positive improvement since early May. The MACD oscillator is pointed down toward the zero line but it has been narrowing.
In the daily Point and Figure chart of AVAV, below, we can see a potential upside price target in the $135 area.
This weekly Point and Figure chart of AVAV, below, is projecting a potential downside price target in the $53 area.
Bottom-line strategy: When the charts are mixed ahead of an earnings report I tend to take a cautious approach. The daily Point and Figure chart suggests we could rally to $135 but the weekly chart suggests a deep decline is possible. I would stand aside until more indicators are pointing higher.
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