For his first "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer stepped outside with Martin Richenhagen, chairman and CEO of AGCO Corp. (AGCO) , to see the company's latest combine harvester and hear how AGCO is faring in the trade war.
Richenhagen said the company's new combine is high-tech but also user-friendly and it produces the cleanest corn, free of dirt, rocks and other debris. Turning to the trade war, Richenhagen said that farmers are cherished around the globe and countries like the U.S. will always subsidize crops in hard times like during a trade war.
Let's check and see if the charts have room for upside.
In the daily bar chart of AGCO, below, we can see a rally from late October to the end of July. Since July the chart has shifted a bit. In August prices broke below the prior low of May to disrupt the pattern of higher lows. This month, so far AGCO has not made a higher high but it is above the bottoming 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line has risen nicely the past 12 months and tells us that buyers of AGCO have been more aggressive. The OBV line made anew high this month hopefully foreshadowing new price highs from AGCO.
The Moving Average Convergence Divergence (MACD) oscillator is in a bullish set-up, rising above the zero line.
In the weekly bar chart of AGCO, below, we can see a mixed picture. One way to describe the price action of AGCO the past three years is sideways with a recent upside bias. Prices are above the rising 40-week moving average line.
The weekly OBV line is "interesting" in that it has been mostly neutral the past two years and did not decline much when prices corrected in 2018. More recently the OBV line has diverged from the price action.
The Moving Average Convergence Divergence (MACD) oscillator is turning upward for a possible bullish crossover above the zero line.
In this Point and Figure chart of AGCO, below, we can see a possible upside price objective of $99 or let's call it $100. A trade at $80.63 is needed to refresh the uptrend.
Bottom-line strategy: With a bullish Point and Figure chart (above) traders could go long AGCO on strength above $81 and then risk below $75 looking for a rally to $100.
