On Monday's "Mad Money" program, host Jim Cramer checked in with Martin Mucci, president and CEO of Paychex (PAYX) , the nation's second largest payroll processor.
Paychex's recent quarter included 16% revenue growth, said Mucci, adding that clients are rebounding and employees are starting to come back to work. Small business growth is also moderating, he noted.
Let's check out the charts of PAYX.
In this daily bar chart of PAYX, below, we can see that prices have traveled higher the past 12 months. Prices corrected lower in January and February and again in August and September.
Prices are now back above the 50-day moving average line and still above the longer 200-day line. The On-Balance-Volume (OBV) line shows a rise the past 12 months with a little softness from August into September. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to a sell-signal in early September as the price of PAYX declined, but it has subsequently improved and could generate a new buy signal.
In this weekly Japanese candlestick chart of PAYX, below, we can see a bottom reversal pattern in September. Prices may move sideways or higher based on this charting technique. PAYX is comfortably above the rising 40-week moving average line. The weekly OBV line is restarting its uptrend and the MACD oscillator could soon cross to the upside again.
In this daily Point and Figure chart of PAYX, below, we can see that prices met an upside price target of $102.
In this weekly Point and Figure chart of PAYX, below, we used a five box reversal filter. Here the software is projecting the $218 area as a potential price target.
Bottom line strategy: In our June 30 review of PAYX we wrote that traders "Continue to hold longs from previous recommendations. Raise sell stop protection to $102 from $96. Our price targets are now $125 and $141."
Hold longs, but raise stops to $106 from $102. We should reach our $125 target early in the fourth quarter.
