For his "Executive Decision" segment of Mad Money Wednesday night, host Jim Cramer spoke with Richard McVey, founder and CEO of MarketAxess Holdings Inc. (MKTX) , the online bond trading platform.
McVey said that MarketAxess has benefited from the coronavirus pandemic, both because trading volume has increased and because they are taking market share. Volumes have exceeded 12.5 million trades per day. Customers are embracing electronic bond trading because it's faster, more convenient and allows their clients to complete more trades per day,
Let's check and see if there is a trade to be made on MKTX.
In the daily bar chart of MKTX, below, we can see that prices have been super strong since the March low. MKTX has been making new 52-week highs this month -- not many stocks have done that! Prices are above the rising 50-day moving average line and the rising 200-day moving average line. We are close to seeing the 50-day line cross above the 200-day line for a bullish golden cross (buy signal).
The daily On-Balance-Volume (OBV) line has been moving up from early March telling us that buyers of MKTX have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line in bullish territory but the indicator has begun to narrow. The price ahead will determine if we see a take profits crossover or not.
In the weekly bar chart of MKTX, below, we can see the past three years of price movement. Notice the long consolidation pattern around the $200 level? This area of buying/accumulation allowed for the doubling in price to $400.
The past year has been another large consolidation pattern, which could propel shares of MKTX still higher. Prices are above the rising 40-week moving average line but not extended.
The weekly OBV line has been in a long sideways pattern but also close to making a new high. The MACD oscillator turned to the upside last month to a fresh outright go long signal.
In this daily Point and Figure chart of MKTX, below, we can see a potential upside price target in the $578 area.
Bottom-line strategy: Traders could try to go long MKTX near $405 risking a close below $375. The $575-$600 area is our longer-term price objective.
