In his "Executive Decision" segment of Mad Money Thursday evening, host Jim Cramer spoke with Daniel Schreiber, co-founder, chairman and CEO of Lemonade Inc. (LMND) , the recent IPO that's disrupting the insurance industry.
Schreiber said the insurance industry is one of the easiest to disrupt and he doesn't envy the CEOs of legacy companies. He explained that the entire insurance industry was built around brokers and commissions using software largely from the 1980s.
Lemonade, Schreiber said, can provide policy approvals in just 90 seconds and pay claims in just three seconds.
Cramer said he's glad Lemonade exists as the insurance industry was indeed ripe for disruption. Let's check in with the charts again. We looked at LMND on July 16 where we looked at two Japanese candlestick charts. We wrote that, "We do not have a lot of price action to work with but traders who are comfortable with IPOs could go long above $90, although they will need to set their own risk parameters. This one is not for the shy or timid or risk adverse."
Let's check out the charts again.
In this daily Japanese candlestick chart of LMND, below, we can see a great balance on the chart. There are seven white or bullish candles and seven red or bearish candles. Trading volume has declined as the high/low range has diminished. The On-Balance-Volume line has been steady and tells me that traders are not liquidating recent longs.
In this updated Point and Figure chart of LMND, below, we can see that a trade at $88.72 will be an upside breakout.
Bottom-line strategy: Two things to look out for. If LMND holds up better than the broader market as it undergoes some profit-taking and rotation it is a bullish sign, in my opinion. Second, if we see a trade at $88.72 it is a signal to go long. Add to longs above $90. Not for the inexperienced.