Fashionable Revolve Group Is Showing the Promise of a Rally

A fan favorite of the Mad Money program is the "Lightning Round" segment where Jim Cramer fields calls from viewers. One caller Wednesday night asked about Revolve Group (RVLV) : "They posted a good quarter and their business model is good," Cramer said.

Let's check out the charts of this e-commerce fashion company to see if they have a positive spin.    

In this daily bar chart of RVLV, below, we can see the entire history of trading from the IPO in June. Prices declined and finally made a low in March with the broad market. Prices have rallied above the now bottoming 50-day moving average line but are still below the declining 200-day moving average line.

The trading volume looks a little more active since late February and the On-Balance-Volume (OBV) line has soared to a new high in just the short time since late March. Buyers of RVLV have become very aggressive according to this simple indicator.

The Moving Average Convergence Divergence (MACD) oscillator has just crossed the zero line for an outright go long signal.  

In this Point and Figure chart of RVLV, below, we used daily price data to construct the X's and O's. A potential upside price target of $26 is being projected. 

Bottom line strategy: Traders could look to go long RVLV at $14 or better risking below $10. The $26 area is our potential price target. 

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