Most weekday nights Jim Cramer offers up his opinion on stocks that callers pose during the Mad Money Lightning Round. On Thursday evening one caller asked about Dycom Industries Inc. (DY) : "This group has been brought down but I like it. I say stick with it." Dycom provides services to the telecom and infrastructure industries.
Let's check out the charts of DY.
In the daily bar chart of DY, below, we can see that prices have been in a downtrend since July. Prices have been testing the downward sloping 50-day moving average line this month but it has yet to move decisively above it. The 200-day moving average line has a negative slope and intersects up around $44.
The daily On-Balance-Volume (OBV) line shows a long decline into a March low and only a limited rebound so far. The Moving Average Convergence Divergence (MACD) oscillator has moved above the zero line for a buy signal but is now narrowing again and could flip back to the bear camp.
In the weekly bar chart of DY, below, we can see that prices have been in a long decline for more than two years. Notice the long decline in the declining 40-week moving average line?
The weekly OBV line also displays a long decline telling us about significant liquidation (selling). The MACD oscillator has been below the zero line for much of the past three years. The indicator has narrowed slightly but I don't find it very encouraging.
In this daily Point and Figure chart of DY, below, we can see a potential downside price target in the $21 area.
Bottom-line strategy: I don't know if the fundamentals of DY will improve but the charts need some serious rebuilding to attract traders and investors. Avoid for now.