In his first "Executive Decision" segment, Jim Cramer spoke with Melissa Reiff, president, chairman and CEO of The Container Store Group (TCS) , the home organization store whose shares are up 145% for the year. The stock currently trades at 14 times earnings.
During this pandemic, the role of our homes has changed, Reiff explained. Your home is now your office, your school and your retreat, she said, which makes maximizing the space you have and making the most of it more important than ever.
Reiff was excited for their partnership with Marie Kondo. She said the Marie Kondo Collection of products will debut nationwide in January 2021 and focus on things that bring joy.
When asked about sustainability, Reiff said that sustainable products are an important focus for them. It's hard, she admitted, as plastic is both functional and affordable. But wherever possible, The Container Store is choosing sustainability.
Let's check and see if the uptrend of the stock is sustainable.
In the daily bar chart of TCS, below, we can see that prices made a small dollar decline with the broader market from February to March but the percentage decline was serious. Prices traded sideways to slightly higher until early September.
Trading volume was on the light side but we can see a slow uptrend from the On-Balance-Volume (OBV) line from March to early September. Trading volume and the OBV line strengthen from September to now. The Moving Average Convergence Divergence (MACD) oscillator turned bullish from June but has been in a take profits sell mode from the middle of October.
In the weekly bar chart of TCS, below, we can see how the direction of prices has changed significantly in the past few months. A downtrend from the middle of 2018 has been broken. Prices are now trading above the rising 40-week moving average line telling us that the longer-term trend is now up.
The weekly OBV line now shows a strong rise from June, which tells us that buyers have become more aggressive with heavier volume being traded in weeks that the stock has traded higher. The weekly MACD oscillator is bullish.
In this daily Point and Figure chart of TCS, below, we can see a nearby price target of $11.12.
Bottom-line strategy: The strength of the uptrend in TCS has been weakening since the middle of October. The Point and Figure price target of only $11-plus is not compelling at this juncture. A weekly close above $12.25 -- the 2018 high -- however, is a major upside breakout and should be bought. Patience.