Jim Cramer is wary of Zynerba Pharmaceuticals (ZYNE) .
"No. If you want this, you want GW Pharmaceuticals (GWPH) ," said Cramer to a caller during the Lightning Round of his "Mad Money" program on Monday.
So, let's check out the charts of ZYNE, to see where it stands.
In this daily bar chart of ZYNE, below, we can see that prices quietly bottomed around $3 in late December. Prices rallied from just $3 to over $16 in less than five months. Since the May zenith, the price of ZYNE has been stuck in a sideways trading range with declining volume. Prices are below the cresting 50-day moving average line, but still well above the rising 200-day line.
The On-Balance-Volume (OBV) line did move up with the price action, but it has leveled off the past six weeks or so. The Moving Average Convergence Divergence (MACD) oscillator has been in a take-profits, sell mode for most of the time since late May. The oscillator looks like it is slipping below the zero-line now for an outright sell signal.
In this weekly bar chart of ZYNE, below, we can see that prices suffered a lengthy decline from 2017 to the end of 2018. The stock price has recovered about half of the prior decline and now the indicators are showing weakness. Prices are above the rising 40-week moving average line but the OBV line looks toppy and the MACD oscillator has crossed to the downside for a take profits sell signal.
In this Point and Figure chart of ZYNE, below, we can see an upside price target of near $15 projected.
Bottom line strategy: ZYNE could bounce to make a third rally failure (May, July and perhaps August) but the 10,000 foot view of ZYNE is bearish and not particularly attractive. Avoid.
