For his "Executive Decision" portion of Mad Money Thursday night, Jim Cramer spoke with John Rainey, CFO of PayPal Holdings (PYPL) , the payments processor. PYPL posted a two-cents-a-share earnings beat, but saw its shares fall almost 4% Thursday as investors worried about the company's guidance.
Rainey said PayPal had a great quarter and the company also reaffirmed its 2019 guidance provided in October. There were some pockets of weakness, currency pressures and slower growth in some areas of the world.
When asked about competition, Rainey explained that it is not a winner-takes-all situation. PayPal currently has over 20 million merchants and 250 million consumers on its platform. There are two billion people around the globe who are under-served financially, he explained, and many have mobile phones which can increase the possibilities.
Cramer said that despite Thursday's profit-taking, he's sticking with PayPal. Let's check the charts again.
In this updated daily Japanese candlestick chart of PYPL, below, we can see that Thursday's price action was more of a "doji" in that prices closed near where they opened giving us a balanced day - neither the bulls nor the bears got the upper hand.
Prices declined towards the rising 50-day and 200-day moving averages but closed well above them.
The level of trading volume was not huge and the daily On-Balance-Volume (OBV) line did not dip much. That tells me that sellers did not become more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator did cross to the downside from above the zero line for a "take profits" sell signal or a sell when the market is in an uptrend.
In this weekly bar chart of PYPL, below, we can see that prices are still above the rising 40-week moving average line.
The weekly OBV line has not weakened but it won't be updated until today's close.
The weekly MACD oscillator still shows an outright buy signal with its crossover above the zero line.
In this Point and Figure chart of PYPL, below, we can see a column of "O's" showing the recent pullback. Prices are back to a support zone and the software still shows an upside price target of $118.96.
Bottom line strategy: In our update of Jan. 25 we said, "Barring a reversal, PYPL looks to be on its way to the $120 area. Traders could hold existing longs or initiate new longs at current levels. Risk a close below $88 for now."