In his second "Executive Decision" segment of Tuesday night's Mad Money program, Jim Cramer sat down with Rich Hume, CEO of Tech Data Corp. (TECD) , the technology supplier. TECD just reported a 38-cent-a-share earnings beat with an 11% rise in revenues and strong guidance. Cramer said that TECD is a great non-cloud tech stock that's worth owning. But before we go long let's check the charts and indicators to see if they support a bullish position.
In the daily bar chart of TECD, below, we can see that prices were trending lower from early March to late October. At the end of November prices gapped above the 50-day and the 200-day moving averages. The slope of the 50-day average line has turned positive but the 200-day line is still pointed down.
The daily On-Balance-Volume (OBV) line declined from March to late September and has since improved. A rising OBV line tells me that buyers of TECD have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in early November for an outright go long signal. The oscillator is still pointed up.
In the weekly bar chart of TECD, below, we can see that prices have rallied above the declining 40-week moving average line. The weekly OBV line does not show much improvement like the daily OBV line.
The weekly MACD oscillator has turned up for a cover shorts signal but is short of an outright go long message.
In this Point and Figure chart of TECD, below, we can see a modest upside price target of $96.59. A decline to $82.25 will weaken this chart.
Bottom-line strategy: TECD is likely to trade sideways to higher in the short run. TECD could rally to the $96 area according to the Point and Figure target while the weekly bar chart suggests a $105 target. Risking below $82 aggressive traders could probe the long side. Investors may want to explore other opportunities as the highs of 2017 may not be overcome.
