EarningsBeats.com Digest for March 17, 2021
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Zeroing In On A Potential Trade Using RRG Charts
I looked at the Top 10 holdings of the small cap technology ETF, PSCT. My first view was of the RRG chart, showing each of these 10 holdings against PSCT as the benchmark. I prefer stocks on the right side of an RRG chart because it shows recent excellent relative strength. I've highlighted EGHT as it's moved down into the weakening quadrant, but it's still significantly to the right side of center. In many instances, a stock will begin
to turn back up towards the leading quadrant. Here's the RRG chart, with EGHT highlighted:
Next, I wanted to see how EGHT looked on its SharpChart, so here it is:
You can see that EGHT's PPO reached 15 back in December. That's tremendous momentum and that's why EGHT was well to the right of center on the RRG chart. The recent consolidation is what has sent EGHT down into that weakening quadrant on the RRG chart and its PPO down to centerline support. As we look at the price chart, 31 has been key
price support, while 39 is resistance. That's the price range until it's broken. The closer that EGHT moves down to 31, the better it looks from a reward to risk perspective for entry. It is quite volatile, however, so it would be more appropriate for those with a higher risk tolerance seeking higher returns.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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