For his second Executive Decision segment of "Mad Money" Monday, host Jim Cramer spoke with Jon Cohen, executive chairman of BioReference Labs, an Opko Health Inc. (OPK) company and one of the companies working 24/7 on Covid-19 testing. Cramer last checked in with Cohen back in April.
Cohen said BioReference Labs is now providing Covid-19 test results in 72 hours, with expedited 24-hour service for front-line workers such as doctors and nurses.
We looked at the charts of OPK back on April 15. At that time we wrote, "While the story of BioReference Laboratories may sound promising the charts of OPK are speculative at best. Avoid." As it turned out, if you ignored my recommendation you would have made some spectacular gains in the past few months. Let's check out the charts again here on Tuesday morning.
In this updated daily bar chart of OPK, below, we can see that the price of OPK has soared sharply. Prices consolidated their early gains with a period of sideways price action in May and June and then again in early July. Trading volume has been increasing, which is a positive sign, along with the rising On-Balance-Volume (OBV) line. The trend-following Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this weekly bar chart of OPK, below, we can see that prices were in a long-term downtrend before bottoming in recent months. Prices turned higher this year and are now above the rising 40-week moving average line. The weekly OBV line shows a long-term decline with a recent sharp surge higher. Buyers have become very aggressive, but hopefully they do not quickly turn back to sellers. The MACD oscillator recently moved above the zero line for a longer-term outright go long signal.
In this daily Point and Figure chart of OPK, below, we can see a potential upside price target in the $12 area.
Bottom line strategy: Experienced traders could go long OPK only if they can afford to risk below $4, the area of the recent consolidation. The $12 area is the price target.