During a recent Mad Money program Jim Cramer told viewers about some key companies that are reporting this Friday. He outpointed Paychex (PAYX) , which could be a buy if it gets hit before it reports. Carmax (KMX) will also provide an update on the red-hot used car market.
Let's check out the charts of PAYX.
In the daily bar chart of PAYX, below, we can see that prices have been in an uptrend the past 12 months. Prices are trading above the rising 50-day moving average line. The 200-day line is bullish and intersects around $92.
The On-Balance-Volume (OBV) line has been steady the past four months. The Moving Average Convergence Divergence (MACD) oscillator is pointed down for a take profits sell signal.
In the weekly Japanese candlestick chart of PAYX, below, we can see that the shares are in a longer-term uptrend. I do not currently see a candlestick top reversal pattern. The slope of the 40-week moving average line is positive.
The weekly OBV line is in a longer-term uptrend. The MACD oscillator appears to be close to (hopefully) a turn higher.
In this daily Point and Figure chart of PAYX, below, we can see a potential upside price target in the $125 area.
e Bottom-line strategy: In our April 8 review of PAYX we wrote that "I do not find the risk and reward parameters for PAYX to be enticing. The recent downside price gap and the Point and Figure target of $87 do not thrill me. Neither does the weekly Point and Figure target of only $104. The company's guidance is also not inspiring." I have no special knowledge of what PAYX will report this week but the charts have improved from early April. Now I would recommend going long PAYX and risking to $96. The $125 area is our price target.
