Jim Cramer told his "Mad Money" viewers Tuesday that earlier this year several special purpose acquisition companies, or SPACs, collapsed under their own weight. Many deals turned out to be just promises, while others couldn't live up to the hype.
However, there is one group of SPACs that has begun making a comeback, Cramer said; that group is the SPACs that have already completed their mergers and now have solid growth and earnings.
Cramer said he's a big fan of energy storage provider Stem Inc. (STEM) . Our electric grid is a wreck, he said, and companies are scrambling to become more eco-friendly. It's no wonder Stem reported revenue up 200%.
Let's check out a few STEM charts.
In this daily bar chart of STEM, below, we can see a mixed picture. Prices have made a nice recovery rally from the middle of May and are now trading above the 20-day and 50-day moving average lines. Trading volume has increased in June and the On-Balance-Volume (OBV) line shows some improvement from May to the middle of June. The Moving Average Convergence Divergence (MACD) oscillator crossed back above the zero line in early June for a buy signal but it has since turned flat.
In this weekly Japanese candlestick chart of STEM, below, we can see another mixed picture. Prices have recovered and we can see a small string of white real bodies, but the size of the real bodies has been getting smaller, telling us there is a balance between the bulls and the bears as neither side is showing they can move this stock very far. This could foreshadow a reversal from up to side or from up to down. The weekly OBV line shows improvement from early May and that is a positive. The MACD oscillator does not give us much to work with but it is positive for now.
In this daily Point and Figure chart of STEM, below, we can see the software is projecting a bullish price target in the $46 area.
Bottom line strategy: With only mixed charts and indicators I cannot get that bullish on STEM. Prices could rally to the Point and Figure target of $46, but I worry that STEM could be dragged lower if the broad market averages weaken this quarter (see our second-half 2021 outlook).