Here’s my take on Restoration Hardware ($RH) (August 09, 2021)
RH
I want to look at Restoration Hardware ( NYSE: RH ). Today we had about an hour-long live trading and Q&A session at Stock Market Mentor, in fact that is going to be a weekly thing. I talked about a lot of stocks, some of our stocks on our Active Trade List, some others that are doing pretty well. But I didn’t really talk about Restoration Hardware ( NYSE: RH ).
Now, this may not be sexy and stuff like that, though they do have nice furniture. But I like the way it’s setting up, so this one to watch. I am not pounding the table saying you must buy right now at 693.38. What I am saying is, the stock is kind of tightening up here, it’s kind of squeezing, this is pretty easy to see.
With this kind of pinch all it takes is a breakout above 700.00 and that should spark more buyers. Right now it is just kind of trading sideways on light volume, very light volume. Let’s see what happens if I take this 30-days down to 20-days, it’s probably going to change quite a bit and it’s because we are able to get rid of these 2 skyscrapers in volume here.
The stock is trading at kind of average volume right now. But what I like is, during this whole thing including this big sell-off here, this 3-day sell-off, the volume was lower than average. And when you see low volume in a sideways move that can actually be a bullish thing, because high volume on a sideways move can mean it’s distribution because the stock is kind of gyrating around a little bit.
It gives you an indication that when the stock gets up people are selling the stock. Then the stock will start crashing and then it goes down a while before people buy the stock. And then it starts going back up and people that aren’t in the stock go, oh my gosh, I get to buy at the bottom. And then they buy it and push it back up. And it goes back and forth. It’s like a yo-yo and it’s not a good trading environment, but something like this really is.
You can see what happens, every so often Restoration Hardware ( NYSE: RH ) will trade sideways for a while. It did this here, it did it here, it did it here, it did it here, and now it is starting to do it here. But each time, boom, you get a breakout to the upside. This is the kind of trade that I like.
Again, I am not saying to go buy this tomorrow. I am saying, watch this stock. Set a price alert at, we’ll say, $700.00. Set a price alert at $700.00 and then when your alert gets hit LOOK at the stock. Don’t just BUY it, just look at the stock, make sure it’s trading up on heavier than average volume out of that 700.00 breakout, and then you’ve got a trade that is worth taking.
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