For his "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer spoke with Avishai Abrahami, co-founder and CEO of Wix.com Ltd. (WIX) , the website creation tool with a stock that's risen 60% in 2019.
Abrahami said Wix was able to add 6.6 million new free users last quarter and over 180,000 paid subscribers. The reason for their growth is simple, he said, there are still a lot of small and midsize businesses that need online services. He said the market potential for Wix remains enormous. And Wix offers a lot more than just websites, Abrahami added.
That all sounds like bullish fundamentals to me so let's take a peek at the charts too.
In the daily bar chart of WIX, below, we can see that prices corrected to the downside in October-December and then "took off" on the upside this year. WIX is above the rising 50-day moving average line as well as the bullish 200-day line. We can see a bullish golden cross buy signal in February as the 50-day line crossed above the slower 200-day line.
The volume pattern does not show a clear expansion from January but the daily On-Balance-Volume (OBV) line shows a rising pattern until this month. Prices made new highs in June but the OBV line has diverged for now creating a small bearish divergence.
In the lower panel of this chart is the 12-day price momentum study, which shows a lower high from May to June while prices made higher highs -- another bearish divergence. These two small bearish divergences suggest to me that we could see prices make a sideways correction in the near-term.
In the weekly bar chart of WIX, below, we can see that prices have nearly risen five-fold from 2016 -- not bad at all. Prices are above the rising 40-week moving average line.
The weekly OBV line shows a peak last June and some weakness over the past twelve months. This is a larger bearish divergence to keep in mind.
The weekly Moving Average Convergence Divergence (MACD) oscillator shows some narrowing in recent weeks. Another weakness to keep an eye on.
In this Point and Figure chart of WIX, below, we can see that the software has counted the X's and O's to come up with a $178 potential price target.
Bottom-line strategy: Prices could just trade higher and higher but there are enough subtle clues to expect some sideways activity before new highs. Traders and investors could look to buy any weakness into the $140-$135 area risking a close below $130. The $175 area is our longer-term upside price target.
