For his final "Executive Decision" segment of Mad Money Thursday evening, Jim Cramer checked in with Aneel Bhusri and Chano Fernandez, co-CEOs of Workday (WDAY) , the cloud software provider.
Bhusri attributed their strong quarterly results to their great sales team that hasn't skipped a beat during the pandemic. He said Workday now has over 3,000 HR customers and 1,000 finance customers who are great references for their prospects.
Fernandez added that Workday had several big wins during the quarter including Fifth Third Bancorp (FITB) , the State of Washington, and Novartis (NVS) . Workday was able to bring new clients online this quarter, including 1.7 million employees at Walmart (WMT) .
Bhusri said that businesses need flexible digital solutions and that's exactly what the cloud and Workday can provide. Businesses cannot survive using rigid, legacy systems. Fernandez continued by saying that Workday offers customers a better experience for themselves and their employees.
Let's check and see how flexible the charts look.
In this daily bar chart of WDAY, below, we can see that prices have been forming an equilateral triangle formation since late August. We can see lower highs on the chart from late August and higher lows also. The price action is balanced. Prices are near the apex of the pattern but have yet to break out. Typically, triangles break out of their pattern 2/3 to 3/4 of the way through the pattern so trading close to the apex makes things trickier.
WDAY is trading above the rising 50-day moving average line and the rising 200-day moving average line. The On-Balance-Volume (OBV) line shows an uptrend from late March/early April which tells us that buyers of WDAY have been mostly more aggressive than the sellers.
The Moving Average Convergence Divergence (MACD) oscillator is just slightly above the zero line which, hopefully, means that this equilateral triangle breaks out on the upside.
In this weekly bar chart of WDAY, below, we can see that prices are in an uptrend and trading above the 2019 high. WDAY is above the rising 40-week moving average line.
The weekly OBV line has been in an uptrend from March of this year and is close to making its own upside breakout. A new all-time high for the OBV line would really be positive for the charts.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line but it has narrowed significantly as prices have traded sideways. The MACD oscillator could turn upwards again if prices strengthen from here.
In this daily Point and Figure chart of WDAY, below, we can see that a trade at $238.53 will be a new high for the move up and should refresh the uptrend. A potential price target in the $272 area is projected.
Bottom line strategy: The charts of WDAY look promising but equilateral triangles can be tricky as the visible pattern of a bar chart shows a balance between bulls and bears. The Point and Figure chart is bullish but I would only buy strength as long as the broad market struggles. Aggressive traders could go long WDAY above $239 risking a close below $220 looking for gains to the $275 area.
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