For his second "Executive Decision" segment of Mad Money Tuesday evening, Jim Cramer spoke with Mike Tattersfield, president and CEO of Krispy Kreme (DNUT) , the doughnut chain.
The company just posted a penny-a-share earnings miss, but reaffirmed its year-end guidance.
Tattersfield said despite the earnings miss, Krispy Kreme had its best second quarter in the company's history. Those strong results were led by the company's global footprint and its transition to an omni-channel model.
Tattersfield also touted their vaccination reward program. He said anyone that's vaccinated can show their card at any Krispy Kreme and get one free doughnut every day throughout the rest of the year.
Let's check on the charts.
In the daily Japanese candlestick chart of DNUT, below, we can see all of the trading since the IPO in early July. Prices have slipped lower and lower and are trading below the declining 20-day moving average line. Most of the candles are red which tells us that the close has been lower than the open.
The On-Balance-Volume (OBV) line is in a downtrend as there has been heavier volume traded on down days than up days. The 12-day price momentum study shows equal lows for momentum which is a bullish divergence when compared to the price action making lower lows.
In this daily Point and Figure chart of DNUT, below, we can see the price decline charted a different way. Prices have reached a downside price target in the $14 area. Prices will need to form a base pattern before we can expect a rally.
Bottom-line strategy: Prices need to show us signs of bottoming before we can recommend the long side of DNUT.
