In his first "Executive Decision" segment of Tuesday night's Mad Money program, Jim Cramer spoke with Dan Rosensweig, president and CEO of Chegg Inc. (CHGG) , the student services company.
Chegg currently serves 6.6 million students around the globe. Rosensweig noted that Chegg was able to add over one million subscribers outside of the U.S. and they see strong growth in over 180 countries.
When asked how the pandemic, Rosensweig said that they've always known that online education was the wave of the future, but COVID has dramatically accelerated that timeline. Rosensweig was most excited about opportunities to re-skill adults for jobs in our new economy.
Let's check and see if the charts of CHGG are ready for further gains or some consolidation.
In the daily Japanese candlestick chart of CHGG, below, we can see that the shares have been in an uptrend from the mid-March low. Prices are trading above the rising 50-day moving average line and the rising 200-day moving average line.
The On-Balance-Volume (OBV) line shows a slow, but steady rise from early May to confirm the price gains. The Moving Average Convergence Divergence (MACD) oscillator is currently above the zero line poised perhaps for a new buy signal but the lines are so tight together we could get a bearish crossover instead. Tuesday's candle shows an upper shadow as traders rejected those gains.
In the weekly Japanese candlestick chart of CHGG, below, we see a slightly different picture. The daily chart above only shows Tuesday's upper shadow but here we see a number of upper shadows in recent weeks.
The OBV line has only made a slight new high in January and is not a strong vote of confidence and borders on a bearish divergence. The MACD oscillator is pointed up but has begun to narrow.
In this daily Point and Figure chart of CHGG, below, we can see a potential upside price target near $150 but also the possibility of a correction as prices are extended here.
Bottom-line strategy: Longer-term we could see CHGG reach the $150 area but in the short-run a correction or pullback seems the more likely path. I think we will get a better buying opportunity in the weeks ahead.
