In his first "Executive Decision" segment of his Mad Money program Wednesday night, Jim Cramer welcomed back Jason Gorevic, CEO of Teladoc Health (TDOC) , the telemedicine provider that's seen its shares stall in recent weeks after the company announced a merger with Livongo Health (LVGO) .
Gorevic said that Teladoc has seen an incredible transformation this year. At the beginning of the year they were fighting for awareness, but as the pandemic hit they moved through the acceptance phase and right into the expectation phase.
Patients who have tried telemedicine don't go back to the waiting room, he said. Patients want, and expect, to have options.
Gorevic added that with the acquisition of Livongo, Teladoc has a strong breadth of services and is truly the only global healthcare delivery platform.
Teladoc is proud to be expanding access for mental health services around the globe. Gorevic said mental health is a vital, but underutilized, part of our healthcare system and one that lends itself to telemedicine.
We last looked at TDOC on July 30 and recommended that "I may be leaving money on the table, but I recommend that traders who are long TDOC from prior recommendations take profits at current levels and raise sell stop protection on the balance of any remaining longs to $202." Let's see how things look 3 1/2 months on.
In this updated daily bar chart of TDOC, below, we can see that prices made a peak just a few days after our July 30 review. TDOC has worked irregularly lower and has made new lows for the move down this month. Prices are trading below the declining 50-day moving average line and below the rising 200-day moving average line. Trading volume has increased since late October and as prices have declined.
The On-Balance-Volume (OBV) line peaked in early August with price and has declined since then, telling us that sellers of TDOC have become more aggressive with heavier volume being transacted on days when the stock has closed lower.
The Moving Average Convergence Divergence (MACD) oscillator is well below the zero line in sell territory and barely showing signs of narrowing.
In this weekly bar chart of TDOC, below, we can see a topping pattern play out over the past six or seven months. Prices are now below the rising 40-week moving average line. When the slope of the 40-week average turns negative it will be another technical sign of weakness.
The OBV line peaked in May and is close to making a new low for the move down.
The MACD oscillator crossed to the downside in late July for a take profits sell signal. The oscillator is still above the zero line, so the trend has not (yet) turned bearish.
In this daily Point and Figure chart of TDOC, below, we can see that prices have reached and exceeded the downside price target in the $189 area.
In this weekly close only Point and Figure chart of TDOC, we can see a potential downside price target in the $138 area.
Bottom line strategy: I assume that traders who took my advice either took profits or got stopped out below $202. Prices have broken the lows of August and September so the trend has turned down. TDOC might find support in the $165-$150 area but that might not be good enough to recommend repurchase as long as the broad market is showing weakness. Stand aside for now.
