Friday, November 11, 2011 10:04:19 AM
Rite Aid - up she goes -
>>> First up is Rite Aid (RAD), the small-cap pharmacy chain that’s seen a dramatic fall from its pre-recession highs. Rite Aid’s household name status hasn’t spared it from an 81% drawdown since 2007, but in the shorter-term, this stock is looking like an upside trade.
That’s thanks to an inverse head-and-shoulders setup that’s been forming in shares of Rite Aid since the August 8 stumble in the broad market. An inverse head and shoulders indicates exhaustion among sellers -- and even though this particular pattern is somewhat lopsided (its right shoulder is much smaller than its left), the trading implications aren’t any different. The price level to watch in Rite Aid is its neckline at $1.20.
>>5 Stocks Poised for Breakouts
A breakout above that neckline level tells us that buyers have overwhelmed the glut of supply of RAD shares that have previously acted as a sort of “price ceiling” for shares. If you decide to take this trade, I’d recommend putting a protective stop just below the right shoulder. <<<
>>> First up is Rite Aid (RAD), the small-cap pharmacy chain that’s seen a dramatic fall from its pre-recession highs. Rite Aid’s household name status hasn’t spared it from an 81% drawdown since 2007, but in the shorter-term, this stock is looking like an upside trade.
That’s thanks to an inverse head-and-shoulders setup that’s been forming in shares of Rite Aid since the August 8 stumble in the broad market. An inverse head and shoulders indicates exhaustion among sellers -- and even though this particular pattern is somewhat lopsided (its right shoulder is much smaller than its left), the trading implications aren’t any different. The price level to watch in Rite Aid is its neckline at $1.20.
>>5 Stocks Poised for Breakouts
A breakout above that neckline level tells us that buyers have overwhelmed the glut of supply of RAD shares that have previously acted as a sort of “price ceiling” for shares. If you decide to take this trade, I’d recommend putting a protective stop just below the right shoulder. <<<
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