"You should buy Visa (V) ," Jim Cramer said during the fast paced Lightning Round of Mad Money Friday night. V has corrected since its early October zenith but it is positioned right above a critical moving average that could be stress tested this week. Let's dig down and look at the charts and indicators for V and see whether it is flight or fight.
In this daily bar chart of V, below, we can see a mixed set of indicators. Prices are in an uptrend the past twelve months. We can see an early October peak and a subsequent correction. Prices have successfully tested the rising 200-ay moving average line in early October and late October. We could see prices test the 200-day line late today or tomorrow. Prices could hold and rebound or fail and close very weak. This will be on my market minder screen tomorrow. The daily On-Balance-Volume (OBV) line has been showing weakness since early October. The trend-following Moving Average Convergence Divergence (MACD) oscillator is turning down for another sell signal. A reversal would probably turn the MACD bullish again.
In this weekly bar chart of V, below, we can see that prices are above the 40-week moving average line the weekly OBV line is bullish and the weekly MACD oscillator turned bearish in early October. The major trend is still up so I do not what to rush to judgement.
In this Point and Figure chart of V, below, we can see an upside price target of $175 but a rally to $152.44 is needed for a breakout. A decline to $128.71 would be bearish.
Bottom line strategy: V is poised right above the 200-day moving average line. Tuesday's price action should be watched closely to see if V holds or breaks this indicator.