In his Executive Decision segment of "Mad Money" last Friday, host Jim Cramer spoke with John Carrington, CEO of Stem Inc. (STEM) , an energy storage and energy management company that recently announced the acquisition of Also Energy, a solar asset management company.
Let's check out the charts and indicators of STEM.
In this daily bar chart of STEM, below, we can see that prices have made lower highs since February. So far buying interest (support) has materialized near $15 but the indicators do not suggest that this zone will continue to hold up. STEM is trading below the declining 50-day and the declining 200-day moving average lines. The On-Balance-Volume (OBV) line has been in decline since February and tells us that sellers of STEM have been more aggressive for most of the past year. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of STEM, below, we only have one year of price action like the daily bar chart above. Prices are in a downtrend and trade below the declining 40-week moving average line. The most recent candle is a spinning top pattern and could mark the beginning of a low, assuming we get a bullish confirmation pattern this week. The OBV line shows a turn upward from late November into December, offerng a glimmer of hope. The MACD oscillator is bearish.
In this daily Point and Figure chart of STEM, below, we can see a potential downside price target in the $15 area.
In this weekly Point and Figure chart of STEM, below, we see a tentative downside price objective in the $7 area.
Bottom line strategy: Renewable energy is an industry we need to pay attention to for investment opportunities but the charts of STEM suggest we should wait for a bottom pattern and signs of sustained aggressive buying. Avoid STEM for now.
