During Monday's "Lightning Round" segment of Mad Money, one caller asked Jim Cramer about Upwork (UPWK) : "I think you should hold this one for the long term," was his advice on the freelancer marketplace.
Let's check the charts and indicators.
In this daily Japanese candlestick chart of UPWK, below, we can see a potential top formation playing out over the past six months or so. Prices failed in the $60 area in February and May, and the bottom of the potential top pattern is the $35 low in May. A close below the May low is needed to complete the top pattern.
Prices are trading below the 200-day moving average line. The 50-day moving average line has a negative slope. A rally and strong close above $65 would turn this potential top pattern to a large, bullish consolidation pattern.
The On-Balance-Volume (OBV) line has rolled over and weakened since April telling us that sellers of UPWK have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is bearish as it is below the zero line.
In this weekly Japanese candlestick chart of UPWK, below, we see what might or could become a double top pattern. We have two peaks in the $60 area separated by more than a month of trading.
The trough between the two peaks represents more than a 10% dip and the weekly OBV line has weakened from the first peak to the second peak. The MACD oscillator is bearish as it is pointed down to the zero line.
In this daily Point and Figure chart of UPWK, below, we can see a potential downside price target in the $39 area.
In this weekly Point and Figure chart of UPWK, below, we can see a potential downside price target of $31. If this target was reached it would mean that the May low was broken.
Bottom line strategy: UPWK needs to hold the $40-$35 area to continue to be a consolidation pattern. A break of $35 would turn the chart into a major top pattern.
