How to Play NortonLifeLock Right Now

Here's what the charts say about the cybersecurity stock.

The fast-paced Lightning Round segment of the popular Mad Money program is where callers get a chance to quiz host Jim Cramer about stocks they are interested in. One caller Tuesday night asked about NortonLifeLock Inc. (NLOK) . "I think this is an undervalued stock and I like it very much," replied Cramer.

Let's check out the charts of this identity theft company, which is a position in TheStreet's Trifecta Stocks portfolio.  

In this daily bar chart of NLOK, below, we can see that the stock was crushed in early February with a huge downside price gap. Prices bounced a little before making a lower low in March. The bounce from March broke above the February high but has rolled over once again. Prices are below the rising 50-day moving average line and well below the declining 200-day moving average line.

The On-Balance-Volume (OBV) line increased in January and February and then it has stayed steady. Very unusual. If we take the movement of the OBV line as a good representation of what traders are doing then we might conclude that the buying and selling have been in balance.

The Moving Average Convergence Divergence (MACD) oscillator generated a buy signal last month but now it is close to crossing below the zero line for a sell signal.  

 

In the weekly bar chart of NLOK, below, we went back five years to get a better view of the trends. Here we can see that dips into the $18-$16 area have been bought a number of times.

 

Despite the wide up and down swings of the past 18 months or so the weekly OBV line has been strong. The MACD oscillator has crossed to a cover shorts buy signal on this longer time frame.  

 

 

In this Point and Figure chart of NLOK, below, we used traditional even dollar increments for the charting. NLOK has been in a long-term uptrend from 2008 and here the chart shows a potential price target of $31.50. 

 

 

 

Bottom-line strategy: I think NLOK needs a lot of base building before it looks good enough for a long recommendation.

 

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