Jim Cramer told Real Money readers yesterday that some traders got involved in this market to shoot short fish in a barrel. They're now going after the shorts in Clover Health Investments and health care company US Well Services.
Cramer felt that a recent deal with Walmart will not turn around Clover. (Clover has partnered with Walmart to offer a series of Medicare Advantage plans aimed at low-income, Medicare-eligible beneficiaries in Georgia.)
In this daily Japanese candlestick chart of Clover (CLOV) , below, we can see that prices have been finding buying support around $7.00. Prices are testing the declining 50-day moving average line. The bearish 200-day moving average line line intersects at $11.
The On-Balance-Volume (OBV) line was steady in March but absolutely exploded on the upside this month. The 12-day price momentum study shows higher lows in recent weeks as prices made equal lows. This is one category of bullish divergence and can foreshadow higher prices.
In this daily Point and Figure chart of CLOV, below, we can see a potential upside price target of $16.
Bottom line strategy: CLOV shows us enough price action to give us a rally/bounce to the $16 area but not enough price action to recommend the long side to get really lucky.