LendingTree Inc. (TREE) got a strong recommendation from Jim Cramer Wednesday during the Lightning Round of his "Mad Money" program. Cramer said "I still say buy, buy, buy Lending Tree." Jim is bullish, but let's check the charts and indicators here on Thursday morning to see what to risk and what price targets are possible.
In this daily bar chart of TREE, below, we can see that prices have doubled from late November -- that's less than eight months. TREE is trading above the rising 50-day moving average line as well as the slower-to-react 200-day moving average. A bullish golden cross of these two averages can be seen back in late January. The daily On-Balance-Volume (OBV) line made its low in late November and has followed prices higher with strength into June. The trend-following Moving Average Convergence Divergence (MACD) oscillator recently turned up to a fresh outright go-long signal.
In this weekly bar chart of TREE, below, we see a mixed picture with the indicators right now. Prices are trying to best the highs of late 2017/early 2018. TREE is trading well above the rising 40-week moving average line. The weekly trading volume has been shrinking since January and the weekly OBV line has yet to make a new high to either foreshadow the recent price gains nor to confirm them. The weekly MACD oscillator has narrowed and could either cross to the downside or widen to a new high, depending on the price action going forward.
In this Point and Figure chart of TREE, below, we can see the recent upside breakout and a longer-term price target around $503.
Bottom line strategy: Barring a correction or reversal it looks like TREE will continue higher with a $500 price target. Look for a dip to the $405-$390 area to be a buyer only if you can afford to risk below $360.