Jim Cramer discussed several Chinese companies on Monday and told Real Money readers that some Chinese government apologists think it is time to buy Pinduoduo Inc. (PDD) , an online technology platform for agriculture.
Let's check out the charts and indicators.
In this daily bar chart of PDD, below, we can see that prices rallied for about four-and-a-half months from early October to the middle of February. The decline from the middle of February has retracted most of the gains and is still pointing down.
Prices are trading below the declining 50-day moving average line and below the cresting 200-day moving average line. The daily On-Balance-Volume (OBV) line has been in a decline since late February and tells us that sellers of PDD have been more aggressive and started well before the recent crackdown from China. The Moving Average Convergence Divergence (MACD) oscillator has been bearish since early April.
In this weekly Japanese candlestick chart of PDD, below, we see a bearish picture. Prices are in a downtrend and are trading below the cresting 40-week moving average line. The weekly OBV line is bearish and so is the MACD oscillator.
In this daily Point and Figure chart of PDD, below, we can see a tentative downside price target in the $75 area.
In this weekly Point and Figure chart of PDD, below, we can see a potential downside price target in the $34 area.
Bottom line strategy: The charts and indicators of PDD (above) suggest further declines in the weeks ahead. Avoid the long side for now.
