During the Mad Money Lightning Round Wednesday evening a caller asked Jim Cramer's opinion on Mitek Systems (MITK) . "This is a good company and they're in the right place."
According to the company's website the firm is about "mobile capture and identity verification software solutions built on the latest advancements in AI and machine learning." That's over my pay grade so let's check out the charts and indicators.
In the daily bar chart of MITK, below, we can see how the shares have progressed from the March 2020 low. There have been rallies and corrections. The rally in December was the strongest to date and it has been correcting lower for the past seven weeks. Prices tested the rising 50-day moving average line earlier this month. The 200-day moving average line also has a positive slope and intersects not all that far below around $12.50.
Trading volume has been increasing since August and the On-Balance-Volume (OBV) line rose until late December. A move lower on the OBV line now tells us that sellers of MITK are more aggressive. The Moving Average Convergence Divergence (MACD) has fallen below the zero line for an outright sell signal.
In the weekly Japanese candlestick chart of MITK, below, we can see a weakening picture. Prices are still above the rising 40-week moving average line but the OBV line has turned down and the MACD oscillator is crossing to a take profits sell signal.
In this daily Point and Figure chart of MITK, below, we can see a potential upside price target around $20.
In this weekly Point and Figure chart of MITK, below, we can see a possible downside target in the $11 area.
Bottom-line strategy: MITK may have a good fundamental story but the charts above are going in different directions. I would wait for the charts to be more in agreement before going long.
