A gun stock that is. And not just any gun stock. Smith & Wesson (SWHC), shows at least 4 reasons that it is a buy. The chart below can be used as your guide. First, Friday the stock filled the gap from the last move higher September 7th and has rebounded up. Next it tested support of the rising trend line in red that has been important since November last year and held. Third it cracked the 100 day Simple Moving Average (SMA) that has acted as a reversal point the last 3 times it has happened and is now back above it. Then the Fibonacci Fan Lines measured from the first move off the base have acted as a channel between the 76.4% Fan Line and a parallel to the 50% Fan Line (about 46%) for the stock to travel in.
Smith & Wesson (SWHC)
Moving off the bottom of the channel, it suggests a repeat has legs up above 12. There are other momentum signals as well pointing higher with the Relative Strength Index (RSI) bottoming at the same p[lace it has 3 previous times and turning higher and the Moving Average Convergence Divergence indicator (MACD) improving but they are derivations of price.
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