For his second Executive Decision segment of "Mad Money" Wednesday, Jim Cramer spoke with Aneel Bhusri, co-founder and CEO of Workday Inc. (WDAY) , a cloud-based human resource software company.
Bhusri said he's very pleased about Workday's partnership with Salesforce.com Inc. (CRM) which will bring Work.com and Workday together to help companies plan for their reopenings. (Salesforce is a holding of Cramer's Action Alerts PLUS charitable trust.)
Bhusri said Workday is still winning new business, both in its human resource and financial products. In higher education, it has been hit or miss, he admitted, as there is still a lot of uncertainty and transition occurring in that arena.
Let's check out the charts of WDAY.
In this daily bar chart of WDAY, below, we can see that prices were in a downtrend long before the pandemic selloff. Prices broke their October low in the February-March slide. From the mid-March low prices have recovered and are trading above the rising 50-day moving average line and above the still-declining 200-day moving average line.
The On-Balance-Volume (OBV) line has improved from its March low and this tells us that buyers of WDAY have been more aggressive. The Moving Average Convergence Divergence (MACD) gave a cover shorts buy signal in late March and an outright buy signal in late April when the indicator crossed above the zero line.
In this weekly bar chart of WDAY, below, we see an improving technical picture. Prices are now back above the bottoming 40-week moving average line. The weekly OBV line has been rising from its March low but is still below its February peak. Early this month the MACD oscillator crossed to the upside from below the zero line for a cover shorts buy signal.
In this Point and Figure chart of WDAY, below, we can see an upside price target in the $190 area.
Bottom line strategy: With prices trading around $170 I see WDAY halfway between a $190 price target and where I would recommend a sell stop -- $150. This is a "risk $1 to make $1" kind of trade in my opinion. I would look for a more attractive setup.