Today I will inspect the charts for Sturm Ruger & Co., Inc. (RGR NYSE) on Lyle's behalf. RGR manufactures, distributes, and exports rifles, shotguns, pistols, and revolvers.
A review of the case will help in the evaluation of this stock against the other manufacturers in the space.
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The three-year chart depicts a stock that enjoyed a nice lift in 2015. Worth mentioning is the double bottom that surface in late December of 2014, as RGR hit a 52-week low of $33.79. The double bottom signalled that the downtrend that started in January of 2014 had come to an end.
The MACD and the RSI generated buy signals in November of 2014 ahead of the 2015 advance as the shares moved out of an oversold situation. The leg up came to an end in August of 2015 as the stock pulled back from the 52-week high of $66.10. In November, the momentum indicators generated buy signals that attracted investors who profited as the shares moved on news out of San Bernardino, California in December.
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The six-month chart brings into focus the buy signals in November and the added boost from the terrorist attacks in California. At this time, the stock is pulling back from resistance near $61.00. The MACD and the RSI are bending lower, indicating that we should expect more selling in the near term. Best case from here is a retest of support at $56.00.
The analysis of Smith & Wesson Holding Corp (SWHC NASDAQ) on December 14 and today's audit point to investments that have moved higher on concerns about the possibility of gun control laws coming into the United States and consumer reaction to terrorist attacks.
In evaluating this stock, its clear that over the last three years that there have been multiple opportunities to trade for profit. The key has been to monitor the action for signals to get on and off the ride on a timely basis.
Next time, I will examine the case for Vista Outdoor Inc. (VSTO NYSE) to conclude the task from Lyle.
Make it a profitable day and happy capitalism!