The Lightning Round segment of Mad Money is a viewer favorite. This is when a few callers get to ask Jim Cramer about stocks that they are interested in. One caller Wednesday night asked about TransMedics Group (TMDX) : "This is a very hard problem to solve and I don't think it's going to be a profitable business anytime soon," replied Cramer. The company was formed to address the growing need for healthier organs for transplantation.
Let's take a look at the charts and indicators.
In this daily bar chart of TMDX, below, we can see a company that traded sideways around $15 and then in November began a rally into March. Prices rallied above the 50-day and 200-day moving averages and the two averages crossed to the upside for a bullish golden cross in early January.
Trading volume exploded in February but I find it interesting that the On-Balance-Volume (OBV) line did not soar. The OBV line was choppy telling me that some traders bought but others used the price strength to sell. Prices traded up to a new high in March but volume diminished and the OBV line was weak. Prices turned down in April and volume increased telling us that traders began to vote with their feet. The OBV line made new lows.
The Moving Average Convergence Divergence (MACD) oscillator crossed below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of TMDX, below, we can see a bearish dark cloud cover pattern at the top in March. The weekly OBV line has turned down and the MACD oscillator is close to a bearish crossover.
In this daily Point and Figure chart of TMDX, below, we can see a potential downside price target in the $23 area.
In this weekly Point and Figure chart of TMDX, below, we see a bearish $7 price target.
Bottom line strategy: The charts of TMDX are not pretty. Avoid the long side and avoid the pain of a bearish chart.