Here's what Jim Cramer had to say about one of the stocks that a caller offered up during the Mad Money "Lightning Round" Monday evening, Ballard Power Systems (BLDP) : "This stock went nuts today, so take a little off the table and wait for it to calm down," said Cramer.
Let's check out the charts of this developer and manufacturer of proton exchange membrane fuel cell products.
In this daily Japanese candlestick chart of BLDP, below, we can see that prices have been in two trends. One trend over the past 12 months is the uptrend. A second trend is the sideways trend since June where prices have swung widely between $14 and $22. Prices are trading above the rising 50-day moving average line and above the rising 200-day moving average line.
Trading volume has been more active since June and the On-Balance-Volume (OBV) line shows a rise the past year with a recent new high for the move up.
The trend-following Moving Average Convergence Divergence (MACD) oscillator just turned upwards to a fresh outright buy signal.
In this weekly Japanese candlestick chart of BLDP, below, we can see that prices made a large base in the $4-$2 area. Prices have rallied strongly and are trading above the rising 40-week moving average line.
Prices have formed a large triangle formation and that can sometimes mean we have seen 75% of the entire rally anticipated for this stock (this is a technique I learned from Ralph Acampora, CMT, back in 1974).
The weekly OBV line is strong/bullish and the MACD oscillator has recently given us a new buy signal.
In this daily Point and Figure chart of BLDP, below, we can see a potential upside price target in the $34 area.
Bottom line strategy: The chart of BLDP has been impressive coming up from a "penny stock" base level. This kind of "name" has probably attracted a fair amount of speculative or "hot" money recently. I agree with Jim Cramer about booking some profits. New long positions should only be considered on a dip towards $18 and only with a sell stop below $16. Remember that hot money can leave as quickly as it arrived. $34 is the Point and Figure chart target but I would settle for $30.