RELL Cup w/ Handle - Long Trade
Richardson Electrics (RELL) makes components for microwaves, power grids, generators and data display monitors. The stock is a rare sign of strength in an otherwise abysmal market.
RELL is completing a cup with handle pattern that began in January, and the stock is currently just 5% from new all-time highs. The relative strength line has been surging for the last 6 weeks. It now has an RS rating of 98/100 on MarketSmith. In other words, RELL is outperforming 98% of all other stocks.
The volume up/down ratio is a bullish 1.39 and we have seen several high-volume up days over the last few weeks - a good sign that institutions are likely building positions in the stock.
I've also overlaid the fundamentals at the bottom of the chart. As you can see, sales are growing at roughly 30% per quarter and profits are advancing at a triple-digit rate. RELL posted $0.25 EPS in 2021 and analysts are forecasting $0.91 in 2022 - a 264% increase year over year.
I think RELL is a buy here. If you want further confirmation, wait to see if the stock hits 15.70 to make new all-time highs.The stop would be beneath the swing low at 13.35 for a 9% risk on the trade.
RELL is completing a cup with handle pattern that began in January, and the stock is currently just 5% from new all-time highs. The relative strength line has been surging for the last 6 weeks. It now has an RS rating of 98/100 on MarketSmith. In other words, RELL is outperforming 98% of all other stocks.
The volume up/down ratio is a bullish 1.39 and we have seen several high-volume up days over the last few weeks - a good sign that institutions are likely building positions in the stock.
I've also overlaid the fundamentals at the bottom of the chart. As you can see, sales are growing at roughly 30% per quarter and profits are advancing at a triple-digit rate. RELL posted $0.25 EPS in 2021 and analysts are forecasting $0.91 in 2022 - a 264% increase year over year.
I think RELL is a buy here. If you want further confirmation, wait to see if the stock hits 15.70 to make new all-time highs.The stop would be beneath the swing low at 13.35 for a 9% risk on the trade.
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