During Monday's "Mad Money," a caller in the show's "Lightening Round" asked host Jim Cramer about Teladoc (TDOC) .
"This is seen as a stay-at-home stock. Buy more on weakness," was Cramer's advice.
Let's check out the charts of TDOC. We looked at the charts of TDOC on Feb. 17 and wrote that "In addition to Crocs I have been slow to upgrade to the latest phone, smart TV, steaming services and dozens of other things that can be connected to the internet and accessed by my voice. TDOC looks vulnerable to some sort of near-term pullback."
Let's check on the charts again.
In this updated daily bar chart of TDOC, below, we can see that prices have been down hard from the middle of February. Prices made a weak bounce in the early part of March, but have slipped lower to make new lows for the move down. TDOC is trading below the declining 50-day moving average line. The stock is also below the 200-day moving average line, which has been rolling over. The On-Balance-Volume (OBV) line has moved sharply lower from its February peak and tells me that sellers of TDOC have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator fell below the zero-line earlier this month for an outright sell-signal.
In this weekly Japanese candlestick chart of TDOC, below, we see a bearish picture. Prices are trading below the declining 40-week moving average line. The November low looks like it will give way and prices could cascade lower. The OBV line has been weakening since May and tells me that sellers have been liquidating TDOC for months. This is not a positive development. The MACD oscillator is close to crossing below the zero-line for an outright sell signal in this time frame.
In this daily Point and Figure chart of TDOC, below, we can see a potential downside price target in the $142 area.
In this weekly Point and Figure chart of TDOC, below, we can see a bearish price target in the $43 area.
Bottom line strategy: Prices still look vulnerable to further weakness. Avoid the long side of TDOC.
