In his second "Executive Decision" segment during his popular "Mad Money "program Thursday on CNBC, Jim Cramer spoke with Stefan Descheemaeker, CEO of Nomad Foods Ltd. (NOMD) . Nomad is a European packaged foods maker and its shares soared 6.6% Thursday after reporting fourth-quarter results.
Descheemaeker said Nomad continues to invest in quality and in its stable of brands, which has given the company pricing power to help fend off rising commodity costs. Nearly 40% of Nomady's business now stems from frozen fish products, with another 20% from frozen vegetables, including Birds Eye, a brand the company purchased.
When asked about changing consumer tastes, Descheemaeker said millennials want health and wellness as well as convenience and affordability, all of which are aligned with frozen foods. He said Nomad is seeing the same trends in the U.S. and Europe.
Fresh or frozen, let's check out the charts and indicators to see what they are suggesting about NOMD.
In this daily bar chart of NOMD, below, we can see that prices made a November-December selloff but have retraced most of that decline. NOMD gapped higher Thursday to close above the rising 200-day moving average line. The shorter 50-day moving average line is below the market and bottoming now.
The level of trading volume increased into the end of February, telling us that participation had increased and broadened out, and the daily On-Balance-Volume (OBV) line has been working higher since late December. A rising OBV line is bullish and tells us that buyers of NOMD have been more aggressive. The daily Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal in early January and crossed above the zero line in the beginning of February for an outright go long signal.
In this weekly bar chart of NOMD, below, we can see that the longer-term trend of prices has been up. NOMD is back above the rising 40-week moving average line. The weekly OBV line has been positive since April 2018 but could use a new high to give me confidence that prices will move up to new highs. The weekly MACD oscillator has been above the zero line for the past two years and is turning up to a fresh outright go long signal.
In this first Point and Figure chart of NOMD, below, we can see a nearby upside price target of $21.27 projected. Not quite an upside breakout.
In this second Point and Figure chart of NOMD, below, we shifted to weekly data. This chart shows a possible longer-term price target of $32.
Bottom line strategy: NOMD may or may not dip to fill some or all of its gap created on Thursday. Aggressive traders who want to go long NOMD could take a starter position at current levels and fill out their position on strength. Risk a close below $18.50. My price targets are $21.50, $25 and $32 longer term.