During Thursday night's Lightning Round of Mad Money, a caller asked about Lithia Motors Inc. (LAD) : "They're doing great and an outlier in the industry," said Jim Cramer. LAD is one of the nation's largest providers of personal transportation solutions. Consumers can buy, sell and service vehicles digitally through their many nationwide locations.
Let's check out the charts and indicators.
In the daily bar chart of LAD, below, we can see that prices bottomed in December with the broad market. Prices have doubled in less than a year. LAD is above the rising 50-day moving average line. The 200-day line turned positive in April and the 50-day line crossed above the 200-day line in March for what is commonly called a bullish golden cross.
The On-Balance-Volume (OBV) line shows a strong rise from December and helps to confirm the price gains. The Moving Average Convergence Divergence (MACD) oscillator has just turned bullish with the recent sharp rally this month.
In the weekly bar chart of LAD, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line turned up in December but was stalled in May and June. A new high soon from the OBV line will help to confirm the price gains.
The MACD oscillator had narrowed in recent weeks but it has quickly turned bullish again.
In this Point and Figure chart of LAD, below, we can see a potential upside price target of $181.
Bottom-line strategy: With a $181 Point and Figure price target we want to be a buyer of LAD. Risk below $125.
