Jim Cramer during "Mad Money" on Tuesday evening answered a caller who asked about VMware Inc. (VMW) in the show's "Lightning Round" segment.
"I think many good things are happening and you should buy more stock," said Cramer.
Let's check out the latest charts and indicators.
In this daily bar chart of VMW, below, we can see that prices have traded sideways since early June. Prices have crossed above and below the almost flat 200-day moving average line. The 50-day moving average line is rising and could soon cross above the slower-to-react 200-day line for a bullish golden cross buy signal. The On-Balance-Volume (OBV) line has been in an uptrend from March with periodic pullbacks. The Moving Average Convergence Divergence (MACD) oscillator has been correcting lower since early June and is near the zero-line, but we could see this indicator turn higher if prices strengthen from here.
In this weekly bar chart of VMW, below, we can see that prices are trading around the flat 40-week moving average line. The weekly OBV line is a little disappointing, but at least it suggests a balance between buyers and sellers for now. The trend-following MACD oscillator has been rising in recent weeks and could soon cross above the zero-line for an outright-buy signal.
In this daily Point and Figure chart of VMW, below, we can see that the software is reading the X's and O's as distribution (selling) and has generated a potential downside price target of $130. Strength above $147 is likely to turn the chart bullish again.
In this weekly close only Point and Figure chart of VMW, below, we can see a potential upside price target of $193.
Bottom line strategy: VMW looks like it can move higher as long as we do not close significantly below $135.
