LivePerson Could Be Dead Money in This Current Market Environment

The shares look poised for declines.

For his final "Executive Decision" segment of Mad Money Thursday night, Jim Cramer checked in Rob Locascio, founder and CEO of LivePerson (LPSN) , the conversational commerce company with shares up 54% for the year.

Locascio said that conversational commerce isn't just for call centers and banks anymore, now retailers and other industries are also seeing the benefits of chatbots and artificial intelligence.

LivePerson has unveiled a number of new services, from a "BurritoBot" at Chipotle Mexican Grill (CMG)  , which allows you to build a burrito to pick up at the restaurant, to new shopping systems that use QR codes next to products to let you ask questions without having to physically speak to a person. 

Let's check out the LPSN charts. We last reviewed LPSN on May 12 and wrote that, "It looks like LPSN can rally further but the issue is where to go long. Prices could just continue higher but I suspect patient traders might be able to go long around $32 and then risk below $28. The price targets are $44 and then $62." 

In the updated daily bar chart of LPSN, below, we can see that the shares reached our $44 price target and our secondary target of $62. The stock corrected in September and a recovery rally this month failed to break out to a new high. The chart has weakened with prices now testing the flat 50-day moving average line. The 200-day moving average line is still positive.

The daily On-Balance-Volume (OBV) line has been flat the past three months telling us that buyers and sellers of LPSN have been balanced. The Moving Average Convergence Divergence (MACD) oscillator crossed to the downside this month at a much lower high than August. Not a sign of strength.

 

In the weekly bar chart of LPSN, below, we can see a less-than-robust picture. Prices have failed twice in the $60-$64 area. The rising 40-week moving average line is still bullish but it is a lagging indicator.

 

The weekly OBV line looks like it is turning down after failing to break above its January high even though prices made new highs. The MACD oscillator is poised to cross to the downside for another take profits sell signal. 

 

 

In this daily Point and Figure chart of LPSN, below, we can see a potential downside price target in the $50 area.  

 

 

Bottom-line strategy: I hope traders used strength around our $62 price target to take profits. Stand aside for now and let LPSN decline and find a new level of support. Let's see how it behaves around $50.

 

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