In one "Executive Decision" segment of Mad Money Tuesday night, our own Jim Cramer sat down with Dheeraj Pandey, chairman and CEO of Nutanix Inc. (NTNX) . Nutanix is an enterprise cloud software provider. The company gave tepid guidance from this quarter, saying that it scaled back lead generation activities that created new business so it could focus more on existing customers. That strategy, the CEO admitted, was flawed, and the company has already course-corrected to adequately manage both functions.
When asked about their business overall, Pandey said he doesn't see cloud virtualization software as being a zero-sum game between Nutanix and rival VMWare (VMW) . He said just like smartphones made the mobile market 10 times bigger, so, too, will cloud computing leaving enough room for all players.
To round things out let's check out the charts and indicators.
In the daily bar chart of NTNX, below, we can see some really choppy trading with a downward bias the past twelve months. Early this month NTNX gapped sharply lower on very heavy turnover. Prices gapped below the declining 50-day and 200-day moving averages.
The daily On-Balance-Volume (OBV) line has been weak all year and tells us that sellers have been more aggressive for many months and not just on the gap lower.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line and is crossing to the upside signaling a cover shorts buy signal.
In the weekly bar chart of NTNX, below, we lose the negative price gap but the sell signals are still there. NTNX is below the declining 40-week moving average line.
The weekly OBV line has been in a decline from March of 2018 and the weekly MACD oscillator is bearish.
In this Point and Figure chart of NTNX, below, we ignore any price gaps and just show a long column of "O's". An upside price projection of $47 is indicated.
Bottom-line strategy: NTNX is not in a technical position to start a major uptrend but we could see a rally to the underside of the 200-day moving average line.
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