In his first Executive Decision segment of "Mad Money" Tuesday, host Jim Cramer spoke with Bracken Darrell, president and CEO of Logitech International (LOGI) , a maker of computer peripheral equipment.
Darrell said despite Wall Street's loss of enthusiasm for Logitech, its business remains strong and all its product categories are still growing. Logitech provides equipment for video conferencing, home and mobile workspaces, gaming and creating and streaming content, all of which are in demand.
Digging into quarterly results, Darrell noted that video sales did slip this quarter. He also admitted that Logitech is not immune to supply chain pressures. The company is adding inventory to the channel in an effort to combat the logistics slowdown going into the holiday shopping season. He expects slight impacts on the company's gross margins as a result.
Let's return to the scene of the crime one more time.
In this daily bar chart of LOGI, below, we can see that prices gapped lower on Tuesday after a long decline. Other downside gaps can be seen in July and September; this suggests that traders are too long and quickly vote with their feet when the news is not what they anticipate. The slopes of the 50-day and 200-day moving averages are negative. The On-Balance-Volume (OBV) line has been in a decline since early June, telling us that sellers of LOGI have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been bearish since the middle of July.
In this weekly Japanese candlestick chart of LOGI, below, we see a bearish setup with no signs of a bottom reversal. The slope of the 40-week average is bearish. The weekly OBV line is in a decline and the MACD oscillator is negative.
In this first weekly Point and Figure chart of LOGI, below, we can see that prices reached a downside price target in the $85 area. This is not a signal to buy as further declines are possible.
In this second weekly Point and Figure chart of LOGI, below, we used close-only prices and a five-box reversal filter. Here the software is projecting the $59 area as a potential downside price target.
Bottom line strategy: No change in our strategy - continue to avoid the long side of LOGI as further declines are possible.