During Thursday's Lightning Round segment of Mad Money one caller asked host Jim Cramer about Switch Inc. (SWCH) . "It's good. It's a good steady business. I like it," said Cramer.
Let's check the charts of this data center operator to see if we can like it, too.
In the daily bar chart of SWCH, below, we can see that the shares made a "V" bottom in March and reached new highs by late April. After the April high prices turned sideways to slightly lower. Now SWCH is trading below the declining 50-day moving average line and above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line shows a rise over the past 12 months but a leveling off this month. It seems that buyers are taking a break or pause in their aggressive buying. The trend-following Moving Average Convergence (MACD) oscillator has slipped below the zero line for a sell signal.
In the weekly bar chart of SWCH, below, we can see a soft-looking picture. Prices look poised to test the rising 40-week moving average line.
The weekly OBV line has been flattish for three months or so and the MACD oscillator is pointed down towards the zero line.
In this first Point and Figure chart of SWCH, below, we used daily price data and can see that the software is projecting a potential downside price target in the $15 area.
In this second Point and Figure chart of SWCH, below, we used weekly price data. Here the chart is projecting strength to the $32 area.
Bottom-line strategy: In the short-run it looks like SWCH can weaken to the $15 area. If prices hold in that zone and the OBV line shows the return of more aggressive buying then traders could go long. On the upside we have a $31 price target.
