In his Executive Decision segment of "Mad Money" Monday, Jim Cramer spoke with Judy Marks, president and CEO of Otis Worldwide (OTIS) , the elevator maker. Otis just reported a second-quarter earnings beat that included a 15.4% rise in organic sales growth.
Marks said Otis' business model is very resilient and its end markets continue to be strong around the globe. Otis is taking market share and saw a 5% uptick in its backlog for the quarter, she said.
When asked about the company's success, Marks said Otis operated at "near perfection" in the second quarter, with a focus on customers and innovation. Marks was excited for the introduction of Otis' latest generation of products that feature new technologies, new ride experiences and new design options for architects.
We last reviewed OTIS back on April 27 and wrote at that time, "OTIS should trade sideways for a period of time before renewed gains. Traders could use this anticipated sideways movement to go long OTIS. Risk to $71. Look for the $105 area as a target."
OTIS is getting close to our $105 price target, so let's check the charts again.
In this daily bar chart of OTIS, below, we can see a strong picture. Prices are in an uptrend above the rising 50-day moving average line and the bullish 200-day moving average. The On-Balance-Volume (OBV) line continues to gain from late January and its rise tells us that traders of OTIS have been more aggressive buyers of the stock. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been bullish since early March.
In this weekly Japanese candlestick chart of OTIS, below, we see a positive picture. Prices are trading above the rising 40-week moving average line. The candles do not show a top reversal pattern. The weekly OBV line is strong and the MACD oscillator is in a bullish alignment above the zero line.
In this updated weekly Point and Figure chart of OTIS, below, we can see the software is projecting a new and higher price target of $111.
Bottom line strategy: Traders who are long OTIS should continue to hold those positions but raise stop protection to $83 from $71. The $105-$111 area is our price target for now.