During the Lightning Round of "Mad Money" Monday, Jim Cramer had this to say about cancer cure company Novocure Ltd. (NVCR) : "I think this is fantastic." The charts of NVCR are pretty strong, so we want to be a buyer. Let's check out the latest charts and indicators.
In this daily bar chart of NVCR, below, we can see can see a clear pattern of higher lows and higher highs -- the simple definition of an uptrend. Prices have become stronger over the past 12 months if you look at the corrections. The pullback or correction in October-December was deeper than the March-April correction. Shallow corrections are a sign that buyers are anxious to put money to work.
Trading volume looks like it has diminished this year, which is a negative, but the daily On-Balance-Volume (OBV) line shows an improving picture from December and is close to making a new high for the move up. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in early May for an outright go-long signal. Recently the MACD oscillator has narrowed but it is not clear whether we will see a take-profits sell signal in the weeks ahead.
In this weekly bar chart of NVCR, below, we can see that NVCR has made a big run the last three years with a base in the $5-$10 area. The rising 40-week moving average line has done a fantastic job in identifying the uptrend and pointing out buying opportunities. Prices are above the rising 40-week moving average line. The weekly OBV line has been in a bullish uptrend since April 2017 and confirms the bullish rise in prices. The weekly MACD oscillator turned up again from above the zero line for a fresh outright go-long signal.
In this weekly, close-only Point and Figure chart of NVCR, below, we can see an upside price target of $87.
Bottom line strategy: It looks like NVCR has the ability to rally to the $87 area based on a Point and Figure "count." Traders could go long NVCR as close to $55 as possible risking below $49 while targeting the $85-$90 area in the months ahead.
