During Friday night's Lightning Round of Mad Money, Jim Cramer said this about ResMed Inc. (RMD) : "This is a good situation. Use the hiccup as a buying opportunity." Let's check out the charts and indicators to see if this is a good time and location to be a buyer.
In the daily bar chart of RMD, below, we can see a wide-swinging sideways market for this stock. Prices gapped sharply lower in late January, breaking below the October low. RMD rebounded quickly in February, and gapped to the upside in early May.
Recently RMD has pushed to a new high over the January zenith. Prices are above the rising 50-day moving average line and the rising 200-day line. A bullish golden cross of the 50-day and 200-day averages can be seen in the beginning of June.
The daily On-Balance-Volume (OBV) line has been steady from March, and is close to making a new high for the move up. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and could generate a fresh go long signal.
In the weekly bar chart of RMD, below, we can see that prices have doubled over the past three years. RMD is above the rising 40-week moving average line with prices breaking out of a $95-$115 consolidation pattern.
The weekly OBV line is positive and the MACD oscillator is bullish and rising.
In this point and figure chart of RMD, below, we do not have to deal with gaps, and we can clearly see the breakout at $117.69. A longer-term target of $148 is being projected.
Bottom-line strategy: Traders could go long RMD at current levels and also on strength. Risk below $112 and look for gains to the $145-$150 area.
