Simple Trading OUTR As of Close 9 December 2015

As a general rule I stay away from solely fundamental arguments in my trading.  At best they’re useless and at worst they’re misleading.  More than 1 trader has gotten his clock cleaned by “believing” in a company even as the stock chart falls apart.

Here’s a rule that can make and/or save you a lot of money… Great Fundamentals + No Chart Confirmation is simply great fundamentals.  Do not buy based on great fundamentals alone.  The trading/investing cemetery is littered with the financial bodies of those who thought they “knew what they owned…”

Outerwall [OUTR] is interesting here for traders… It looks set to put in a “Dead Cat Bounce” before likely resuming it’s downward trek in no small part because the business is broken… OUTR owns Redbox the DVD rental company… anyone want to buy that business with cheap streaming available?

Didn’t think so.

Still, let’s have a look at the chart from a few different perspectives…

TAOST Value Zone – The most recent close below the weekly TVZ happened in early August.  From there, it was just a matter of waiting for retracement to sell.

OUTR W 9 Dec 2015 TVZ

 

Fibonacci Retracement w/Magnet Trade Setup – This chart shows that a 50% retracement of the High to Low swing would take price right to the TVZ (inside ellipse) at the moment.  I think price could easily bounce hard off the $40 area, so $64 to $66 is not out of the realm of possibility.

OUTR W 9 Dec 2015 Fib

 

Horizontal Support/Resistance – The arrows show that the area covered by the yellow horizontal line was initially resistance, but has become support.  That very level is essentially where the most recent down move has stalled.  What happens here will go a long way to telling us how price is likely to perform in the near term.

OUTR W 9 Dec 2015 Hor Support Resistance Line

 

Rising Trendline – The up arrows show where price tested the rising trendline.  The red arrow shows where price broke through the trendline and thus broke support…

OUTR W 9 Dec 2015 Uptrend Line

 

Altogether Now – This chart just shows all of the indicators and drawings together… Never set your charts up like this… always choose 1 to 2 indicators for a chart… no more.

OUTR W 9 Dec 2015 All Ind

If you recall, I’m not a fan of shorting individual stocks, so as long as price is south of the weekly TVZ, there’s nothing to do… And I have a feeling this stock is gonna spend a lot of time below TVZ…

KIS,

The Trader