NeoGenomics Is Ready to Turn Higher

Here's our technical strategy.

During Thursday night's Lightning Round segment of Mad Money one caller asked Jim Cramer about a company called NeoGenomics (NEO) . "I like it and I'd be a buyer," said Cramer of the cancer diagnostics and pharma services firm.

Let's check out the charts. 

In the daily bar chart of NEO, below, we can see that the shares made a correction from February into March. Prices pulled back to the rising 200-day moving average line and tested it successfully twice in March. The shares have rallied to the underside of the declining 50-day moving average line. Sometimes this is a place for rallies to fail but I doubt it will be the case with NEO.

The On-Balance-Volume (OBV) line has been strong and has gone up to new highs foreshadowing further price gains, in my opinion. The Moving Average Convergence Divergence (MACD) oscillator has made two cover shorts buy signals since March as it edges closer to the zero line and an outright buy signal. 

 

In the weekly Japanese candlestick chart of NEO, below, we see a bullish picture. Notice the lower shadows as prices test the rising 40-week moving average line. This is traders rejecting the lows below a key indicator.

 

The OBV line has been positive for the past three years and the MACD oscillator is pointed down but narrowing.  

 

 

In this daily Point and Figure chart of NEO, below, we can see a potential price target in the $62 area.  

 

 

Bottom-line strategy: Risking below $45, traders could go long NEO at current levels and on strength. The $62 area is our first price objective. 

 

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