Jim Cramer said on "Mad Money" on Wednesday that he's a fan of the medical device company Medtronic PLC (MDT) , which has recently pulled back to just 18-times earnings. He said the recent weakness is a buying opportunity, especially after Medtronic's acquisition of Mazor Robotics. Let's check out the charts of MDT.
In this daily bar chart of MDT, below, we can see that prices have been correcting lower from late September. MDT is below the cresting 50-day moving average line, but still well above the rising 200-day moving average line. Trading volume has declined during this pullback, and the On-Balance-Volume (OBV) only shows a modest decline, which suggests that longs have largely stayed with their positions.
The trend-following Moving Average Convergence Divergence (MACD) oscillator just fell below the zero-line, so it will not take much of a rally to reverse direction.
In this weekly bar chart of MDT, below, we see a mostly bullish set-up. Prices are above the rising 40-week moving average line. The weekly OBV line has been strong and bullish from April, and that helps confirm the price gains. The MACD oscillator is just now crossing to the downside for a take profits sell signal.
In this weekly close-only Point and Figure chart of MDT, below, we can see that the software is projecting a possible, or potential, upside price objective of $161.
Bottom line strategy: MDT should find buying support towards $104. Traders could use this test of support as a place to go long, or risk to $100 and look for longer-term gains to the $150-$161 area.
