In his Real Money column, "Here Are My Top 10 Pandemic Paradox Stocks" Jim Cramer discusses how the outdoor theme continues with names like Tractor Supply (TSCO) , the place to go for gardening, and Scotts Miracle-Gro Co. (SMG) , for the products you need when you realize you don't have a green thumb after all.
We looked at TSCO on July 21 so let's check out SMG now after it beat June-quarter earnings and revenue expectations, raised guidance and announced a special dividend.
In the daily bar chart of SMG, below, we can see the price action through Tuesday's close. Prices are up sharply in early Wednesday trading. SMG has nearly doubled in price from its March low. Prices are above the rising 50-day moving average line and the rising 200-day moving average line.
Trading volume has been active and the On-Balance-Volume (OBV) line turned upwards in March. Buyers of SMG have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly bar chart of SMG, below, we can see that the shares have been in an uptrend from late 2018. Prices are above the rising 40-week moving average line.
The OBV line is strong and the MACD oscillator is bullish on this longer time frame.
In this daily Point and Figure chart of SMG, below, we can see an upside price target of $164, which is where prices are trading early Wednesday.
In this weekly Point and Figure chart of SMG, below, we can see a longer-term potential upside price target in the $194 area.
Bottom-line strategy: When prices gap higher there is a natural tendency for traders to pull back and wait or hope for a better buying opportunity. Sometimes that happens and sometimes it doesn't.
Traders could go long a starter position in SMG Wednesday morning and then look to add if there is either a one-day dip or sideways movement. Risk a close below $140 for now. The $194-$200 area is our longer-term price target.
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