During Tuesday's "Mad Money" program, host Jim Cramer spoke with Kristin Peck, CEO of Zoetis Inc. (ZTS) , for his Executive Decision segment following the animal health company's presentation at the JP Morgan Healthcare Conference.
Peck said as a result of the pandemic more people are adopting pets. And because many people are working from home, they're spending a lot more time with their pets and noticing health issues and concerns.
Peck said Zoetis pays attention to the pricing of its products, acknowledging that most pet owners self-pay for their pet's medical care. The company is also expanding rapidly overseas, including in China, and is investing into treatments for fish, which have become the fastest-growing pet category.
In our last review of the charts of Zoetis on Dec. 20 we wrote, "ZTS is in a longer-term uptrend that should continue when the weakness in the broader market averages abates. Traders could go long ZTS on available weakness, risking to $222. The $325 area is our Point and Figure price target."
Unfortunately it did not take long for ZTS to begin a correction and reach our stop. Let's visit the charts again.
In this updated daily bar chart of ZTS, below, we can see that prices stayed strong into the end of 2021 but then quickly turned lower. So far prices have stopped just above a potential support zone from $210 to $190. ZT has broken below the 50-day moving average line and is still above the rising 200-day line, which intersects just below $220. The On-Balance-Volume (OBV) line only shows weakness from late December into January so we do not have a long period of distribution (selling). The Moving Average Convergence Divergence (MACD) oscillator quickly turned lower and is just above the zero line and a potential sell signal.
In this weekly Japanese candlestick chart of ZTS, below, we can see a small gravestone doji at the end of December to mark the high of the move. The large red (bearish) candle starts the decline but the most recent candle could be a spinning top and could be the start of a bottom reversal. The 40-week moving average is rising and intersects around $205. The weekly OBV line shows us a three-year rise and is still bullish. The MACD oscillator only recently crossed to the downside for a take profit sell signal.
In this daily Point and Figure chart of ZTS, below, we used intraday prices. Here the software projects the $165 area as a potential downside price target. Support in the $210-$190 area can be seen.
In this second daily Point and Figure chart of ZTS, below, we used close-only price data. Here the software shows us a price target of $351. Big difference.
In this third and last Point and Figure chart of ZTS, below, we used weekly close-only price data. Now the price target is $330.
Bottom line strategy: Aggressive traders could look to probe the long side of ZTS on a close above the high of the low day.