For his first "Executive Decision" segment of Mad Money Friday night, Jim Cramer spoke with Sandy Macrae, president and CEO of Sangamo Therapeutics Inc. (SGMO) , a biotech company whose shares rose 4.9% after the company announced a new partnership with Biogen (BIIB) .
Macrae explained that the partnership with Biogen allows Sangamo to perform early-stage research on a number of genes that Biogen is interested in and Biogen will then help to develop and commercialize the drugs that come from that research. Sangamo is currently working on treatments for both Alzheimer's and Parkinson's disease.
Let's check out the charts of SGMO.
In the daily bar chart of SGMO, below, we can see that the stock has been trading lower the past 12 months but declines have been followed by steep recovery rallies. SGMO is currently below the declining 50-day moving average line as well as the declining 200-day moving average line.
The pattern of volume is hard to "read" but the daily On-Balance-Volume (OBV) line has been in a decline from July telling us that sellers of SGMO have been more aggressive for months.
The 12-day price momentum study in the lower panel shows higher lows from December even though prices have made lower lows. This difference between the price action and the momentum study is a bullish divergence and tells us that the pace of the decline has been slowing and this can sometimes foreshadow a rally or a price recovery.
In this weekly bar chart of SGMO, below, we can see that prices have been in a decline since early 2018. Prices are below the declining 40-week moving average line.
The weekly OBV line has been following the price action but the 12-week price momentum study shows equal lows in momentum from October and this is bullish divergence when compared to the price action.
Bottom-line strategy: The charts of SGMO, above, are showing early signs of bottoming with the bullish divergence from the momentum study. Put SGMO on your shopping list but wait until we see some stability in the broader market, which might not happen until later this month.
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