During Friday's Mad Money program Jim Cramer gave viewers his game plan for this holiday-shortened week. On Wednesday, before the market opening, payroll processor Paychex (PAYX) reports it latest earnings and its numbers should give us a read on the small business economy, Cramer says.
Let's take a look at the charts of PAYX.
In the daily bar chart of PAYX, below, we can see that the shares have nearly doubled from their low in the middle of March. PAYX made a large sideways consolidation pattern from May to September before continuing the uptrend. Prices are trading nicely above the rising 50-day moving average line and above the rising 200-day moving average line. The 50-day line crossed above the 200-day line in late September for a bullish golden cross buy signal.
The On-Balance-Volume (OBV) line bottomed in March/April and has risen with the price action and just made a new high for the move up. The 12-day price momentum study shows lower highs from November into December and that tells us that price acceleration is slowing and that is a bearish divergence when compared to the price action which shows higher highs. Bearish divergences can sometimes foreshadow corrections or pullbacks.