In his second Executive Decision segment of Tuesday "Mad Money" program, Jim Cramer sat down with Bill Doyle, executive chairman at Novocure Ltd. (NVCR) , the cancer-fighting biotech with shares that have risen 165% for the year.
Doyle said Novocure's treatment method is not surgery and it's not radiation or chemotherapy. Novocure's therapy uses electrical fields to disrupt cell division in solid tumors. The company has been making strides in educating doctors about its successes and its treatment is becoming more widely accepted.
Doyle said Novocure therapies are now covered by all major health plans and by Medicare. Novocure can treat any cancer cell its electrical fields can access, including in the head, chest and abdomen, where many of the toughest cancers are found. Novocure also is doing a lot of research into other diseases that might benefit from its therapies.
Let's check in with the front desk and visit with the charts and indicators.
In this daily bar chart of NVCR, below, we can see a very impressive rally. In about four months NVCR's stock price doubled. Prices have tripled from December. NVCR is above the rising 50-day moving average line and perhaps extended above the rising 200-day line. The volume bars or histogram show volume increasing from April and the On-Balance-Volume (OBV) line shows a rising pattern from December to confirm the strong price gains. The 12-day price momentum study in the lower panel shows higher highs in momentum and thus no bearish divergence with price. All of this is bullish.
In this weekly bar chart of NVCR, below, we can see a bullish picture with prices above the rising 40-week moving average line. NVCR is up more than ninefold in the past three years. The weekly OBV line shows a long and sustained rise the past three years to support the rally. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line in a bullish configuration with no signs of narrowing.
In this weekly Point and Figure chart of NVCR, below, we can see a potential longer-term upside price target of $185. Hold on to you seats.
Bottom line strategy: I have not seen a chart as bullish as NVCR in a while. With the broad market weakness we might get a chance to go long NVCR around $80. Risk below $70 for now. The price targets are $100 and then perhaps $185.