In his second "Executive Decision" segment of Mad Money Tuesday, Jim Cramer sat down with Rob Bernshteyn, CEO of Coupa Software (COUP) , the cloud-based expense management platform that just delivered a massive 14-cents-a-share earnings beat.
Bernshteyn said whether it's good times or bad, companies always want to control their expenses, which is why Coupa has become so popular and continues to grow. He explained that the name stands for "comprehensive, open, user-centric, prescriptive and accelerated" procurement and expense management, but what they really deliver is value as a service.
Expanding on the notion of value, Bernshteyn said that not only can companies track expenses with Coupa, they can even get preferential treatment and pricing from select suppliers. The company's platform also alerts companies to suppliers that have had less-than-stellar reputations in the past.
Despite all Coupa's successes over the past 10 years, Bernshteyn said it's still early in the digital transformation. Shares of Coupa are up 139% for the year.
We looked at the charts of COUP on Monday and reasoned that, "The overall sense I get from the charts above is that we are looking at a continuation pattern and that prices could break out on the upside. Despite this I think traders should reduce their long exposure today ahead of the numbers." Let's check out the latest charts and indicators for COUP.
In this daily candlestick chart of COUP, below, we can see that prices made a big range day opening sharply lower and testing the rising 50-day moving average line before closing well off its lows and up for the day. Trading volume was heavy but we don't know for certain that the coast is clear. Sustained strength above $155 is probably what will be needed to convince me that an upside breakout is underway.
In this updated weekly candlestick chart of COUP, below, we can see that the candle pattern so far for this week looks like a potentially bearish "hanging man" pattern.
Two things are wrong with this - first is we only have two days of trading so the pattern could well change by Friday, and second, would be that next week's candle pattern would need to confirm this week's yet unfinished pattern. Label this a work in progress. The rest of the indicators look bullish.
In this Point and Figure chart of COUP, below, we tweaked the data to look at 5-box reversals to reduce the up and down swings. Here a trade at $160.21 will be a new high for the move up and could mean we have been looking at a continuation pattern rather than a reversal pattern.
Bottom line strategy: The price action looks like it could be "touch and go" for a few more days but the indecision I see will be resolved. My gut and the strength of the broad market since early October has me favoring the upside.