During his "Mad Money" program Friday, Jim Cramer gave his game plan for this week, starting with Thor Industries Inc. (THO) and Eli Lilly and Co. (LLY) , the latter of which will be meeting with analysts. Cramer said Thor had gone from market darling to disappointment and he sees no catalyst for a turnaround. He did expect good things from Lilly, however, and he'd be a buyer. Let's check out the charts of both of these companies before the opening here on Monday.
In this daily bar chart of THO, below, we can see that this stock has struggled the past 12 months. Prices bounced with the broad market from late December but have drifted back down near the December low the past six weeks or so. Both the 50-day moving average line and the 200-day moving average line have bearish slopes. The volume pattern does not show a rise in the first quarter to suggest that the rally is sustainable. The daily On-Balance-Volume (OBV) line only firms in January, which is not enough evidence of aggressive buying. The 12-day price momentum study is not showing us a bullish divergence to foreshadow a potential rally.
In this Point and Figure chart of THO, below, we can see a potential downside price target of $45, which would be a new low for the move down. Not a good endorsement.
In this daily bar chart of LLY, below, we see a much different narrative. Prices began a rally last June and the 200-day moving average line has a bullish slope. Prices are currently below the declining 50-day moving average line, but that could change quickly with a short rally. The daily OBV line has been steady the past two months and the trend-following Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal in early May and is not far from the zero line and an outright buy signal.
Bottom line strategy: The charts of THO are not attractive now but LLY is buy-able with sell stop below $113 or on strength above $121.