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Ok. So, maybe not. At any rate, I went long RSH yesterday based in large part on a daily chart that is showing signs of stabilizing amid accumulation. Essentially, RadioShack has seen strong buying volume and improved price action on basically no news, which is something that I love to see as a technician. What that tells me is that the buyers are starting o present themselves in a meaningful way without needing headlines as a catalyst or excuse to get involved. Whether they see value here or have inside information is irrelevant to me.
Instead, I am content playing this name based on the improved technicals. Specifically, we have an inverted head and shoulders bullish bottoming pattern with an initial neckline breach, giving us a modest price objective of $17. Moreover, price has had plenty of time to negotiate the 20 and 50 day moving averages, respectively.
Even if RadioShack eventually goes the way of Blockbuster, I see enough time from now until then for a high probability long swing trade. Note that I will probably move my stop loss up to the ” neckline,” of around $15.60.
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That “modest” objective of 17 is about 8 1/2 percent before commissions. Do that once a month and you are doing very well indeed, sir Chess.
Indeed.