You never really know what someone is focusing on ahead of time during the Lightning Round on Mad Money but the recent news of Viacom (VIAB) and CBS Corp. (CBS) made yesterday's call somewhat predictable. Jim Cramer said this about VIAB: "I think you should just buy it."
Let's go back again to charts of VIAB.
In this updated daily bar chart of VIAB, below, we can see that prices quickly decline to the $26 area but did not break the March low. Trading volume surged and the On-Balance-Volume (OBV) line moved lower.
In the lower panel is the slow stochastic indicator - one of a number of overbought/oversold indicators. This indicator is way down in oversold territory. Being oversold is not a buy recommendation or signal as prices can always get more oversold. However, this is similar to the oversold readings at the March low and the December nadir.
In this weekly bar chart of VIAB, below, we can see that prices are below the declining 40-week moving average line. This setup looks like the three previous lows in price going back to late 2017.
The weekly OBV line only made a slight dip and weekly slow stochastic indicator is in oversold territory.
In this Point and Figure chart of VIAB, below, we can see that prices reached and exceeded the bearish price objective of $28.66. The March low (look for the "3" on the chart) is so far offering some support.
Bottom line strategy: My style of trading is to not to try to pick the bottom but to find bottoming patterns where a risk point can be found (like a higher low for example). With VIAB I don't mind bending my rules to probe the long side with a sell stop below $25.