WGO caught my eye this week on Wednesday 3/22/17 when it gapped up nearly 2 points and opened at 29.75 (above the previous day’s open of 29.55) and quickly sold off all the way down to 27.55 which erased the entire gap up, followed by immediate buying and rallying up two points, bringing it back towards the level of the day’s open and ultimately closing at 29.55, two points off the low. WGO also had higher than usual volume that day, about 1.4 million shares versus an average around 600k. On the next trading day (Thursday 3/23/17) the stock again opened higher and and had a high of 30.58 which is a remarkable place to find resistance. See the above chart which I highlighted in blue a handful of times that WGO has reacted with support or resistance at this level. Also seen, the two candles that touch the 200 day moving average (red line) are Tuesday’s and Wednesday’s trading sessions of this week. What does all of this mean? Well, the week started off with a lot of selling pressure followed with a lot of turbulence on Wednesday but ultimately resolved higher for the week. In summary, here are a few things observed this week that I find interesting and could be clues that the stock is about to go higher.
- The 2 point gap up, selloff, and rally on Wednesday 3/22/17
- Huge volume behind Wednesday’s action
- Oversold stochastic for the past two weeks, starting to climb higher
- Approached 30.60 level 3 times in March, numerous times in the past 6 months
- Resolved higher for the week
If I were to be trading WGO, I would want to see a clean break above the 30.60 level in order to initiate a long position. Would be targeting a move back towards 35 and stop below recent lows around 27.50. Also worth noting an upcoming 10 cent dividend, with an ex-dividend date of 4/10/17.