RAC - Charts & Price Action, page-6040

My take on the charts.

Weekly first. For me, the shape of a consolidation pattern (whether that be an ascending, descending, or symmetrical triangle, or a sideways box) is of lesser importance. The shape of a pattern in isolation will not provide a good indication of future price action. It needs to be viewed in context. Much more important is the direction of the larger trend, and volume levels during the consolidation phase.

In the case of RAC, broader trend is clearly up. Tick. More so, volumes are declining as the price consolidates. Tick. If volume is elevated during a sideways range (whatever the shape), that often suggests distribution and will more likely coincide will a topping pattern and trend reversal. Whereas a pattern forming on declining volumes is suggestive of a continuation pattern, meaning expect price to break in the direction of the prior trend.

On the daily, when price is trading sideways, On Balance Volume (OBV) can be a good tool to look at. It is a cumulative total of volume that is added to when the price closed higher for the day and subtracted from when price closes lower for the day. So, when OBV is rising while price is trading in a sideways range, it means more volume is going through on ‘up days’ than is going through on ‘down days’. Again, for me, this is a sign that buyers are more eager than sellers, which will eventually result in price moving up.

All in all, broader trend is strongly up, and price is consolidating on declining volumes, with OBV rising. Breakout/confirmation level for me is a close above $3.55, on increased volumes.

Summary: Get it while you can. Disclosure: HELD.

Weekly Chart


Daily Chart