During Tuesday night's Lightning Round, a favorite part of Jim Cramer's Mad Money program, a caller asked about Scotts Miracle-Gro Co. ( SMG) : "This one has gone up too far too fast. I say don't buy it," said Cramer.
Let's check in on SMG and see if there is a better location to go long.
In the daily bar chart of SMG, below, we can see that prices broke their uptrend recently by making a lower low in September versus August and closing below the cresting 50-day moving average line.
The On-Balance-Volume (OBV) line has turned lower and is now signaling to us that sellers of SMG are more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator is in a sell mode below the zero line.
In the weekly bar chart of SMG, below, we can see some weakness in the indicators. Prices are still above the rising 40-week moving average line but it looks like prices were extended above that indicator in August.
The weekly OBV line is stalled to perhaps turning lower and the MACD oscillator has crossed to the downside for a take profits sell signal.
In this Point and Figure chart of SMG, below, we can see that a potential downside price target of $89 is being projected.
Bottom-line strategy: SMG is in the process of correcting so let it decline perhaps to the 200-day moving average line and then give it another look. Stand aside in the meantime.
