In his second "Executive Decision" segment of Mad Money Tuesday evening, Jim Cramer sat down with Glen Tullman, founder and executive chairman of Livongo Health (LVGO) , which reported a strong quarter Monday, only to fall 9% in Tuesday's broad selloff.
Tullman explained that Livongo is a digital health solution for 147 million people with chronic conditions. The company collects data and information from their customers, and uses it to provide insights to help keep them healthy.
The company has a 94% retention rate and the company ultimately saves the health care system money by providing better outcomes.
In this daily bar chart of LVGO, below, we can see that prices made a sharp decline for the two months after going public - not a confidence builder, in my opinion. Prices rebounded in October and November and have basically traded sideways the past three months. With the lack of price history we used the 20-day and 50-day moving averages. Prices have crossed above and below these shorter averages for several weeks now.
The daily On-Balance-Volume (OBV) line made a low in late September and has been zigzagging sideways since that low. A rising OBV line would be preferred.
The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line in the past couple of months and tells us there is little trend strength.
In this daily Point and Figure chart of LVGO, below, we can see that the software is projecting a potential upside price target in the $35 area.
Bottom line strategy: The charts and indicators of LVGO are not projecting a strong picture. The Point and Figure chart shows an upside price target but it ignores time and volume. Aggressive traders might consider putting LVGO on their shopping list but I am in no rush to do so.