For the Executive Decision segment of "Mad Money" Tuesday, Jim Cramer spoke with Joe Kiani, chairman and CEO of Masimo Corp. (MASI) , a global medical technology company that makes noninvasive patient monitoring equipment, medical devices and a wide array of sensors.
Jim and Joe discussed the battle brewing over health data privacy and electronic medical records. Kiani noted that patients are harmed when doctors and hospitals don't have all the information they need to diagnose and treat the problem. Let's check out the charts of MASI.
In this daily bar chart of MASI, below, we can see that prices have been in an uptrend the past year. Prices have made a number of corrections and pullbacks along the way. We can see a successful test of the rising 200-day moving average line in April and another one in November. MASI is above the rising 50-day moving average line and we can see that the On-Balance-Volume (OBV) line has also been positive for much of the past year. A rising OBV line is a sign that buyers of a stock have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has moved widely around the zero line the past year because of the periodic corrections in the stock price. The indicator currently is above the zero line but crossing to a take profits sell signal.
In this weekly bar chart of MASI, below, we can see that prices have doubled in the past two years after a base pattern in the $80 area. Prices are above the rising 40-week moving average line and we can see a number of successful tests of the line in the past two years. The weekly OBV line shows a slow but steady rise the past three years to support the uptrend and the MACD oscillator is bullish on this longer time frame.
In this daily Point and Figure chart of MASI, below, we can see that the software has projected a potential upside price target in the $190 area. A move to the round number of $200 should not be ruled out.
Bottom line strategy: As someone who underwent major surgery last year and acted as a caregiver to my wife after surgery two years ago, I understand some of the issues and problems with health data privacy. It's not black and white. The uptrend in the stock is easier to discuss. Traders could play MASI from the long side around $170, risking below $160 while looking for gains to $190 and maybe $200.