• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Rite Aid Charts Send Wrong Signals to Investors Who Hope for a Recovery

Sellers of the drugstore chain's stock have been aggressive for months and the overall technical picture is weak.
By BRUCE KAMICH
Oct 02, 2019 | 08:35 AM EDT
Stocks quotes in this article: RAD

During the Lightning Round of Tuesday's Mad Money program, Jim Cramer took calls from viewers asking about stocks they are interested in. Jim had just one word for a caller regarding Rite Aid Corp. (RAD) : "Sell." Let's check out the charts and indicators.

In this daily bar chart of RAD, below, we can see that prices have suffered a big decline the past 12 months. Trading volume has been heavier since the May/June period, which may be because there is a shift in ownership as disgruntled longs liquidate their positions. Prices are just now above the flat 50-day moving average line, but for most of the last year RAD has been below this indicator. The slower-to-react 200-day moving average line is bearish.

The daily On-Balance-Volume (OBV) line was in a decline from last October to late August, telling us that sellers of RAD have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is barely above the zero line and may cross it again for a sell signal.

In this weekly bar chart of RAD, below, we can see a very dramatic decline the past three years. Prices are below the declining 40-week moving average line. Weekly trading volume is heavy the past few months and the weekly OBV is weak. The MACD oscillator has been below the zero for nearly the entire time. Not a pretty technical picture.

In this Point and Figure chart of RAD, below, we can see that prices have been in a consolidation pattern since May (look for the "5" on the chart). There is a lot of volume (left scale) in this area, which is good news and bad news. If prices can rally to $10 it will be positive, but a decline to $6 or $5.50 will likely mean these possible buyers are underwater and we could see further weakness as they liquidate losing positions.

Bottom line strategy: Like Jim Cramer, I have a one-word strategy on RAD: Avoid.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Consumer | Health Care Equipment & Services | Healthcare | Pharmaceuticals | Retail | Mad Money | Real Money

More from Stocks

Let's Shine a Light on Lucid Motors as It Slides Downhill

Brad Ginesin
Jul 2, 2022 1:00 PM EDT

LCID's market cap has been deflated, so is it now a bargain, or can it slip further?

Stop Wishing, Hoping and Praying and Take Control of Your Investing

James "Rev Shark" DePorre
Jul 2, 2022 10:00 AM EDT

The most powerful thing an investor can do is embrace the idea that they don't know what the future holds.

If You've Got Time, These Three Dividend Aristocrats Should Pay Off

Bob Ciura
Jul 2, 2022 7:30 AM EDT

There high-growth dividend stocks will be here over the long haul.

Welcome to Second Semester on Wall Street, Here's How to Make the Grade

Jim Collins
Jul 1, 2022 4:36 PM EDT

Think you can own big tech? You might just get an 'F' for that. Here's what will get you on the other side of this year.

We Got a Break, but the Heat Is Still On

James "Rev Shark" DePorre
Jul 1, 2022 4:22 PM EDT

A limited rally cooled some of the negativity on the market, but guess what's going to hit the fan soon?

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • 04:41 PM EDT PAUL PRICE

    First-Half Results - Putrid; Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 mark...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login