The great outdoors is here to stay, and the best way to play the trend is with Yeti Holdings (YETI) , makers of high-performance outdoor gear, Jim Cramer told his Mad Money viewers Friday night.
Cramer said it's been a mistake to bet against Yeti ever since it came public in 2018, and when the company reported last week the earnings were again spectacular. Yeti delivered both a top and bottom line beat with 42% revenue growth. That's tech company growth, Cramer pointed out.
Additionally, Yeti's direct-to-consumer business, which has far better margins, grew by a stunning 59%. Cramer said Yeti is still a buy giving all of this growth.
The last time we visited the charts of YETI was way back on July 21 of 2020 where we recommended "Continue holding longs. Raise stop protection to a close below $40 and raise your price target to the $58 area." Prices reached our $58 target by early November and it has kept climbing. What's the forecast now?
In this updated daily bar chart of YETI, below, we can see that prices have more than doubled in the past 12 months. YETI is trading above the rising 50-day moving average line and above the rising 200-day line. The daily On-Balance-Volume (OBV) line shows a long and steady rise the past year as buyers of YETI have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is pointed down in a correction mode but still above the zero line.
In this weekly Japanese candlestick chart of YETI, below, we can see that prices have been in a strong uptrend since the March 2020 low. Prices are trading above the rising 40-week moving average line. The weekly candlesticks show two recent large lower shadows as traders rejected the lows.
The OBV line has mostly moved higher from last March to confirm the price gains. The MACD oscillator is bullish but we can see a little narrowing in recent weeks.
In this daily Point and Figure chart of YETI, below, we can see a possible downside price target in the $68 area. A trade at $88.19 or higher should improve the picture.
In this weekly close only Point and Figure chart of YETI, below, we can see that the software is projecting the $135 area as a potential price target.
Bottom line strategy: Traders could go long YETI at current levels risking to $81. The $135 area is our price target now.
