In his third Executive Decision segment of "Mad Money Tuesday" Jim Cramer spoke with Michael Mente and Mike Karanikolas, co-founders and co-CEOs of Revolve Group (RVLV) , an online fashion retailer.
Mente said volatility comes with the territory of being a fast-growing, disruptive company. He said Revolve was built from the ground up as a digital retailer, which makes it hard for brick-and-mortar retailers to match its flavor of style and innovation. "It's hard to disrupt yourself" and try something new, Mente said.
We have not reviewed the charts of RVLV since May 14, 2020, so let's see how the charts look today.
In this daily bar chart of RVLV, below, we can see that prices made a significant rally from October. Prices are trading above the rising 50-day moving average line as well as the rising 200-day line. Earlier this month RVLV gapped below the 50-day line but it has since recovered. The On-Balance-Volume (OBV) line shows a positive trend from September and this tells us that buyers of RVLV have been more aggressive for several months now. The Moving Average Convergence Divergence (MACD) oscillator is pointed down and is just a fraction above the zero line.
In this weekly Japanese candlestick chart of RVLV, below, we can see a mixed picture. The first weekly candle of August shows us a large range of trading with both an upper shadow and a lower shadow, telling us that traders rejected the upside and the downside. Prices are above the rising 40-week moving average line. The weekly OBV line shows a long rise before two months of sideways movement. The MACD oscillator is poised to cross to the downside for a take profit sell signal.
In this daily Point and Figure chart of RVLV, below, we can see that the software has generated a potential downside price target in the $38 area.
In this weekly Point and Figure chart of RVLV, below, we can see a tentative price target of $98.
Bottom line strategy: The downside price gap earlier this month is bothering me. The daily bar chart will be in a better place if prices can climb back above $74. Wait for price strength and increasing volume before going long RVLV.