For one of his Executive Decision segments of "Mad Money" Thursday, Jim Cramer spoke with Ynon Kreiz, chairman and CEO of toymaker Mattel (MAT) .
Mattel reported a stellar first quarter Thursday that saw sales climb 47%. Not only did Mattel exceed expectations, but it posted double-digit increases for the third consecutive quarter.
Among the highlights was Barbie, which saw tremendous growth of 86% in the quarter as the brand's new image and products resonate with girls around the globe. The transformation of the American Girl brand was also accelerating, Kreiz said, leading to 22% growth.
We looked at the charts of MAT back on April 14 and wrote, "MAT probably needs a longer period of sideways price action before renewed gains. Continue to hold longs with a $17 sell stop. Gains to $48 are possible longer term."
Let's see how the charts look here on Friday morning as our sell stop has been out of the way.
In this updated daily bar chart of MAT, below, we can see that prices have traded firm over the past several days. The rising 50-day moving average line has acted as support. The On-Balance-Volume (OBV) has quietly firmed, telling me that buyers are starting to become more aggressive again. The Moving Average Convergence Divergence (MACD) oscillator has just crossed to the upside for a fresh outright buy signal.
In this weekly Japanese candlestick chart of MAT, below, we can see a picture that has improved since last week. The chart shows two upper shadows above $21 but even more lower shadows below $20, telling me that the path of least resistance is higher. The 40-week moving average line is still very positive and the weekly OBV line is pointing up.
In this daily Point and Figure chart of MAT, below, we used close-only data and a traditional even-dollar scaling. Here, a price target of $48 is shown as a major long-term downtrend has been broken (line not drawn).
In this weekly Point and Figure chart of MAT, below, we used the same approach as the daily chart and here, too, we get a $48 price target.
Bottom line strategy: MAT is probably going to open higher this Friday morning. Continue to hold prior longs and consider buying more above $22. Raise sell stops to $18.50 from $17. Our price target for later in 2021 is $48.