Looking at the chart above you can see that the stock is still in a clear downtrend but there may be signs of a forming bottom. First of all, the stock seems to be trying to hold above $16.19 after breaking below that January low a few times in recent weeks. To me that looks like a failed breakdown of a descending symmetric triangle and you know how much we love failed breaks around here (since they lead to fast moves). The chart also has the look of a double bottom perhaps an eve and eve and the volume pattern is right for this.Its too early to say if SLM has bottomed or not but I think its close. According to Bulkowski, the double bottom is not confirmed until the price closes above the high between the two bottoms, that would be $23. However, given the significance of $20 as past support/resistance, the 50 dma's proximity and a declining trendline now under $20, I would watch that level for an entry.
3 comments:
Rumors of a Carl Icahn bid:
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_U/threadview?m=tm&bn=16717&tid=9981&mid=9981&tof=2&frt=2
I got some calls.
I don't think you are looking at a descending triangle. It's a rounded turn down... the top, downward sloping trend line should have prices touching and bouncing off, not riding along it for a long period. The problem here is what Bulkowski calls "too much white space." Price action isn't really moving from trendline to trendline.
"the top, downward sloping trend line should have prices touching and bouncing off, not riding along it for a long period"
Thats a good observation and I think you are right. It seems there are sellers waiting to get rid of SLM on any pop, but they aren't very aggressive.
SLM closed at a new 52 week closing low well below that $16.19 price I've been watching. I got stopped out of my calls and if anything I'd say its a short now. I would consider SLM again if it can close over $20.
Thanks for the comment CG.
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