Alerts & Commentary
Alert – RMBS
RMBS
We continued to be puzzled by RMBS‘ price action but now is the time to view the stock as it is behaving and not as we think it should.
Consequently, it is clear that RMBS is now moving in concert with its Short-Term (ST) technicals and most specifically its 20-Day MA, which has rolled over to the downside and is taking the stock price with it. As a result, we are evaluating more aggressive income generation and tighter hedges during this expiration cycle.
On a positive note, both the Weekly AND Monthly trends are looking extremely bullish, both having completed classic double-bottoms AND a healthy CUP w/HANDLE over the past two (2) years. Those of you who read or follow IBD will recognize this pattern and see that the HANDLE is now being formed in a classically defined manner on both of these LT trends.
There is significant support from the Weekly trend at $20.75 with the 20-Week MA. RMBS has been following this trendline upward since last September with several tests of its support, each time bouncing back to the upside and a continuance of the upward trend.
We will be watching these closely. Any positive news could cause a BO to the upside on both of these LT trends above $26… Once that occurs, that would likely start a LT run that we have all been waiting for.
Coach BD
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