Student learning platform Chegg (CHGG) has rallied from a low in May. Prices gapped above the 200-day moving average line in early November on an EPS beat. Let's inspect the charts and indicators to see if shares of CHGG can get promoted to the next level or we will see prices held back.
In this daily bar chart of CHGG, below, we can see two distinct price gaps. We can see a gap to the downside in early May and a gap to the upside in early November. Now look at the very heavy trading volume on the downside gap in May and compare that to the upside gap volume - sellers in May were way more aggressive.
The On-Balance-Volume (OBV) line shows a rise from May and only recently has it moved above the October high. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but in a take profit mode.
In this weekly Japanese candlestick chart of CHGG, below, we can see that prices are trading above the bottoming 40-week moving average line. The trading volume is disappointing but the OBV line shows a rise. The MACD oscillator is close to crossing above the zero line and generating a buy signal.
In this daily Point and Figure chart of CHGG, below, we can see an upside price target in the $49 area.
In this weekly Point and Figure chart of CHGG, below, we can see the same price target as the daily chart: $49.
Bottom line strategy: The charts of CHGG are not bad but I want to see how the semester finishes up before making a buy recommendation. Stay tuned.
Employees of TheStreet are prohibited from trading individual securities.