Traders Should Be Careful With DiamondPeak Holdings

Let's review the charts and indicators.
Stocks quotes in this article: DPHC

The "Lightning Round" segment of Mad Money Monday evening delivered its usual fast-paced advice from Jim Cramer. One caller asked about DiamondPeak Holdings (DPHC) : "Take some profits and let the rest run," Cramer told viewers.

Let's check out the charts of this blank check company before they merge into electric-pickup start-up Lordstown Motors.

In this daily Japanese candlestick chart of DPHC, below, we can see that prices have taken off on the upside the past two months. No top reversal patterns are showing on this quick-turning candlestick chart.

The On-Balance-Volume (OBV) line has been rising telling us that buyers have been more aggressive. The 12-day price momentum study does not display a bearish divergence versus the price action.  

 
In this daily Point and Figure chart of DPHC, below, we can see a potential upside price target in the $57 area. 
 
Bottom line strategy: Profits have built up quickly and could evaporate quickly too. Longs should risk a close below $25.
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TAGS: Mergers and Acquisitions | Investing | Markets | Stocks | Technical Analysis | Trading | Mad Money | Electric Vehicles

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