In his second "Executive Decision" segment of Mad Money Friday night, Jim Cramer sat down with Juan Ramon Alaix, CEO of Zoetis Inc. (ZTS) . ZTS is an animal health company with shares that vaulted 9.8% last week after another strong quarter.
Alaix said that when you are talking about animals, diagnostics is incredibly important, because animals can't tell you what hurts or what's wrong. That is why vets are relying more and more on tests and treatments provided by Zoetis.
Alaix added that Zoetis has effective treatments for a number of conditions, including ticks, fleas, heartworm and other parasites. The company is also developing a combination pill that will include treatments for all three that can be given just once a month. He said the company's dermatology drug for dogs, Apoquel, has reached sales of $464 million a year.
Alaix said that China is now the third largest market for Zoetis, just behind the U.S. and Brazil, both of which have been among the leaders in the humanization-of-pets trend.
That is the fundamental story in a nutshell, but what about the technical story? Let's check out some charts.
In this daily of ZTS, below, we can see a sharp rally last week. Prices jumped about $8 on increased volume - a bullish sign. The speed of the rally is more impressive if you notice that it cut right through overhead resistance from $88 to $96. ZTS is now above the bottoming 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line has also soared in recent weeks and is only a fraction below the June peak in this indicator.
The Moving Average Convergence Divergence (MACD) oscillator crossed the zero line earlier this month for an outright go long signal.
In this weekly bar chart of ZTS, below, we can see a bullish picture the last three years. Prices are above the rising 40-week moving average line.
The weekly OBV line is positive and close to a new high.
The weekly MACD oscillator just crossed to the upside for both a cover shorts buy signal and an outright buy signal.
In this weekly Point and Figure chart, below, we can see that a weekly trade at $96.45 will be an important double top breakout. A longer-term price target of $120 is being projected.
Bottom line strategy: ZTS is in a powerful uptrend so traders looking to get long should not expect much of a dip or correction. Do some buying here and add on strength above $96.45. Risk a close below $91 for now and set your sights on the $120 area.