Teladoc Health Inc. (TDOC) was favored by Jim Cramer in last night's Lightning Round of his Mad Money program on CNBC. Unfortunately the charts and indicators are telling me a different story. Take a deep breath and let it out slowly as we check out the charts.
In this daily bar chart of TDOC, below, we can see that prices have been in a downtrend from early October. Trading volume has been pretty heavy the past three months and the daily On-Balance-Volume (OBV) line has weakened. A declining OBV line tells me that sellers are being more aggressive with heavier volume being traded on days when the stock has closed lower. The moving averages are not helping the picture with a bearish slope on the 50-day average line and the 200-day line cresting. In the lower panel the 12-day price momentum indicator shows roughly equal lows from October as prices declined. This is a bullish divergence but not the strongest category as prices are going down but at the same pace as earlier.
In this weekly bar chart of TDOC, below, we can see that prices rallied nearly nine-fold over the past three years. Amazing. Prices stayed above the rising 40-week moving average line for a long time but now prices are below the 40-week average line and the line has turned flat. The weekly OBV line peaked in September and has been declining telling me that sellers are now more aggressive. The 12-week momentum study at the bottom has not slowed nor shown a bullish divergence. On this time frame it suggests that buyers are not yet attracted to the long side at these levels.
In this Point and Figure chart of TDOC, below, we can see a projected downside price target or objective of around $39.
Bottom line strategy: TDOC is not showing enough positive technical clues to warrant purchase. Take two and call me in a few weeks.