In his first "Executive Decision" segment of Mad Money Friday night, Jim Cramer spoke with Omar Asali, chairman and CEO of Ranpak Holdings Corp. (PACK) , the packaging supplier Cramer called a stealth way to play the e-commerce revolution.
Asali explained that Ranpak is a leader in eco-friendly packaging. They focus 100% on paper and fiber-based packaging with zero plastics of any kind and support sustainable forestry. In addition to packaging supplies, Ranpak also provides automation systems for e-commerce operations to help them ship more boxes, more efficiently.
Asali added that Ranpak is also focused on innovation. He said nobody likes to see small items packed inside of big, wasteful boxes, which is why they've created customizable packaging. Ranpak also invests in materials science, hoping to one day replace styrofoam, plastics and other non-sustainable materials.
Let's check out the charts of PACK.
In the daily bar chart of PACK, below, we can see that the shares have soared from their base around $8. PACK is in an uptrend above the rising 50-day moving average line as well as above the rising 200-day moving average line. Prices recently spiked higher from $15 to over $21 in just two sessions. PACK is pulling back slightly Tuesday.
The On-Balance-Volume (OBV) shows a bullish rise from late June which tells us that buyers of PACK have been more aggressive for several months now. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the limited weekly bar chart of PACK, below, we can see that the shares are in an uptrend above the rising 40-week moving average line. Prices got to be twice the level of the 40-week average and thus they can be considered overbought or extended.
The OBV line is bullish and confirms the price action. The MACD oscillator is bullish in this longer time frame.
In this daily Point and Figure chart of PACK, below, we can see a potential upside price target in the $46 area.
Bottom-line strategy: PACK is likely to pull back in the days ahead. This is not unusual after the rapid rise this month. A correction to $16 area is possible. Aggressive traders should trade PACK from the long side after this anticipated correction plays out. The $46 area is our longer-term price objective.