Rite Aid Corp. (RAD) is in the news Thursday morning as it called off its merger with the privately owned grocery chain Albertsons. This was just ahead of a vote by the Rite Aid shareholders. The stock is lower this morning but let's step back and look at the bigger picture.
In this daily bar chart of RAD, below, we can see a long coil-like pattern since September. The up-and-down swings on the chart have gotten tighter and tighter with the trading volume drying up at times. The declining 200-day moving average line is turning flat and the shorter 50-day average line has been crossing the price action many times.
The daily On-Balance-Volume (OBV) line shows a slow rise from March to July, which could mean that some buyers were optimistic that a deal was going to get done. These buyers may be motivated sellers today. The trend-following Moving Average Convergence Divergence (MACD) oscillator shows no sustained trend now.
In this weekly chart of RAD, below, we cannot find much to write about. The price looks flat as does the 40-week moving average line. The weekly OBV line is neutral and the MACD oscillator has moved higher for the past year and it is still below the zero line. How do you spell "boring"?
In this Point and Figure chart of RAD, below, we can see some chart points. A decline to $1.60 or to $1.54 is needed to weaken the chart and a rally to $2.03 is needed to attract buyers.
Bottom-line strategy: RAD has been "trend-less" for months. I do not see a successful trading opportunity here.
