In an “Executive Decision” segment of Mad Money Wednesday evening, Jim Cramer spoke with Dan Springer, CEO of DocuSign Inc. (DOCU) . DocuSign reported a magnificent quarter at the beginning of the month, Cramer said. However, because the stock rallied so hard into the event, it’s down about 25% from the highs.
It’s unlikely that the world will go back to its pre-coronavirus ways of life. At least in the way it pertains to DocuSign’s business. Simply put, the digital transformation has made it easier for employees and customers, while saving users a ton of money, Springer said. The company is now starting to offer online notaries, but even more exciting is DocuSign’s artificial intelligence offering.
On Sept. 22 we wrote that, “DOCU could make an upside bounce but with several negative signals or clues the course of least resistance for DOCU could be lower.”
In the daily bar chart of DOCU, below, we can see that prices have been trading above the 50-day moving average line. The daily On-Balance-Volume (OBV) has been trading sideways in September after its big retracement. A turn to the upside in the OBV line would be a positive sign for the stock.
The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but could move back above it if prices strengthen.
In the weekly bar chart of DOCU, below, we can see that prices are well above the rising 40-week moving average line.
The weekly OBV line has been rising for the past year and the MACD oscillator is in a take profits sell mode.
In this daily Point and Figure chart of DOCU, below, we can see a potential upside price target in the $280 area.
In this weekly close only Point and Figure chart of DOCU, below, we can see a downside price target of around $174..
Bottom-line strategy: DOCU could bounce in the near-term but until the weekly Point and Figure chart improves I do not want to be committed to a long position. Stay flexible.
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