One last look at a broken pattern on YRC Worldwide (YRCW).
Discussed in this article: YRC Worldwide Inc. ( $YRCW )
I’m sticking with YRC Worldwide ( NASDAQ:YRCW ) at least one more day, that would be today; we’ll see, maybe over the weekend, but maybe not, I’d suggest if you’re new to this stuff go back and check out my video here on this day just to catch you up to speed. What I was really talking about was that this stock, after kind of blasting out of this little pattern here, big move up, and then on this day it looked to me like we could have an intraday reversal, well we did have an intraday reversal, but it looked to me like it could really be the mark of the end of this breakout and we’d get more of a pullback.
You’ll note that on this big volume day, that was actually this day, so the following day we had pretty big volume as well, not quite as big but it was big, a reversal, and my suggestion was you definitely want to get out of this stock, but the other thing is that when a stock does something that it’s not supposed to do, the kind of thing that it wouldn’t just be you that guessed wrong, it would be some technical event, basically a pattern, that should be a peak here for example, and then move lower. If that pattern breaks down, if the stock doesn’t do what its, quote, “supposed to do” then you need to take note of that and typically go the other way.
So when the stock broke above here you’ve got to look at that and say, assuming you’re trading this stock you could just say, “Well forget this, I’m going to move.” But I want to look at this chart because it’s instructive for just about any other stock that you’re going to trade. So now that the stocks made this, gapped down and then traded up right away, what do we have? We’ve got a series of higher lows and higher highs, volume, heavier than average, on the decline a bit, but still heavier than average. I guess they got a refinancing deal, or the union workers voted to extend a contract, something like that, and so the stock is still being bought. I would imagine that a lot of this sell-off, not all of it, but a lot of the sell-off was due to the uncertainty. It’s funny how when companies have a difficult time with financing and expenses investors don’t really like that.
So the stocks been climbing up for a while and my suggestion is, you just stay long this stock, forget about the 200-day moving average, which is this line, simply because it hasn’t really been that relevant. Now, with that said you’ll notice I’m not taking it off my screen and the reason is because the 200-day moving average can become relevant at any time. Right now that level is at 16.21, so you could see the stock move right up to here and then start rolling over. Keep it on your screen but don’t look at it as anything significant and until it says, “Hey, I’m significant.” I would just stay long the stock, let it move, you don’t know how far up the stock’s going to go, but so far its printing these higher intraday lows, higher intraday highs, closing up how many days in a row, one, two, three, four, five, six seven, let’s go for lucky eight tomorrow.