Friday, August 13, 2010

RAD Watch

Four days ago I wrote about Rite Aid Corp.(RAD) showing bull signals on a volume spike.

Since then the volume has stairstepped down, and so has the price. The stock has moved to bear phase on Person's Proprietary Signal (pps) and the fast stochastic, the third phase switch in seven days.

Clearly a stock that doesn't know its own mind. (Do stocks have minds? Free will? A liking for chocolate fudge?)

RAD $0.95

On Aug. 9, the day of the bear signal, RAD got a good rating on a new bond issue.

Although the Aug. 9 move had placed RAD above its recent range, I wrote at the time, "For my own account, I don't like RAD very much, mainly because of a deep dislike of trading after the news is out."

Deep dislikes confirmed. The stock is now trading at the bottom of its range and below the 20-day simple moving average.

On the Person's chart, it has dropped to the lower weekly pivot, before pulling back up a bit.

Person's Table
ppspps openupper pivotlower pivot
RAD $0.95 $0.97 aug12 $0.99 +4.2% $0.93 -2.1%

Reversal Levels
  • $1.17, +23.2% (200-day ma)
  • $1.06, +11.6% (swing high)
  • $0.96, +1.1% (20-day ma)
  • $0.95 <== You are here.
  • $0.93, -2.1% (swing low)
Bottom line: I didn't like RAD on Aug. 9. I still don't like it on Aug. 13. The stock is too prone to whipsaws, the trader's bane.  

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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