Advanced Technical Analysis - RSH
Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
RadioShack (RSH:NYSE) is at a potentially interesting juncture in its price pattern. Having peaked in February of 2004 with attendant momentum divergences and DeMark exhaustion indicators, the stock started a 6 month impulsive looking slide into its lows in August 2004, losing 28% in the process. The fact that this decline looks impulsive (5 waves) and is part of a larger bear trend from the stocks $79 all time peaks in 1999, suggests that the probability for this stock is that its larger bearish secular trend is getting 'back in gear' now. The sell side has 8buys, 8 holds, and 3 outright sells while the short interest ratio is at its lowest level in more than 3 years.
We would note as well that RSH peaked this past Monday at precisely (to the penny) the 78.6% retrace point of the entire 6 month decline from February to August. Further the bounce off the August lows is looking very much like a series of "3"s, or a corrective bounce (it looks to be a double zig-zag or an ABC-X-ABC). On another note, there is a nice Fibonacci time relationship at the peaks registered on 11/29 this week. Specifically, the bounce from August 13th to November 29th took 108 days. The previous (impulsive-looking) decline from February 19th to August 13th took 176 days. Thus the bounce took 0.614 times as long as the decline, which is almost precisely a perfect phi relationship between the impulse (down) and corrective (up) waves.
The short term interpretation of the bearish case for RSH suggests technical weakness from current prices or at any bounce with trade moving thru the recent peak at $34.07 (given the nice Fibonacci relationships in price and time at this past Monday's peak) negating the near-term bearish call (not advice).
n on this website solely reflects the analysis of or opinion about the perf=
ormance of securities and financial markets by the writers whose articles a=
ppear on the site. The views expressed by the writers are not necessarily t=
he views of Minyanville Media, Inc. or members of its management. Nothing c=
ontained on the website is intended to constitute a recommendation or advic=
e addressed to an individual investor or category of investors to purchase,=
sell or hold any security, or to take any action with respect to the prosp=
ective movement of the securities markets or to solicit the purchase or sal=
e of any security. Any investment decisions must be made by the reader eith=
er individually or in consultation with his or her investment professional.=
Minyanville writers and staff may trade or hold positions in securities th=
at are discussed in articles appearing on the website. Writers of articles =
are required to disclose whether they have a position in any stock or fund =
discussed in an article, but are not permitted to disclose the size or dire=
ction of the position. Nothing on this website is intended to solicit busin=
ess of any kind for a writer's business or fund. Minyanville management=
and staff as well as contributing writers will not respond to emails or ot=
her communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>
Daily Recap Newsletter