Rite Aid Corporation (RAD)

Rite Aid Corporation (RAD) is looking very interesting as a trading opportunity right now. The technical setup offers the best window into what traders can expect whether they are bullish on the play or bearish. We’re therefore exploring these deeper technical numbers with a view to helping traders make better decisions on the current trading prospects of RAD. Before we get into the numbers let’s take a look at the importance of these numbers that help to make up the technical chart. In trading you can often take lots of shots without having any real hits. Technical charts, when used rightly, can significantly improve your chances of scoring hits. This is why we build our trading theses around them.

RAD’s position, when dissected using the very handy technical charting tool we’ve championed above, now looks very interesting. This position is opened up first by the stock’s current day’s high $3.17 and the accompanying day’s low $3.06. As things stand, the current day’s high means the stock is positioned negatively when matched against the prevailing 52-week high of $8.77 set by RAD on 06/16/17. Given the range, and in particular the position of the stock’s low, we can make the assessment that the day’s low represents a 7.24% since 01/13/17. As a trader you can take this to mean something positive as it relates to RAD latent upside potential and the opportunities, or not, that it provides for active traders. It’s not just traders who are taking a keen look at the stock, either. In the weeks and days of data amassed for the stock, a more open display of analysts. From their perspective, the stock has presented a compelling picture via data. This data has created a $6.19 for RAD. As it stands, this target price is below the biggest gains set by the stock in recent times. Other important data is starting to inform the way analysts and traders see the stock. RAD beta is currently 1.85. Traders that use the beta metric in their trading assessments of stocks know that the current beta for RAD is greater than 1, and as such, gives clear directional bearing for upside. The current beta, as assessed below or above 1, suggests that RAD is theoretically more volatile than the composite sector to which it belongs. At this stage you should start to see what is developing for the stock. Let’s move more inland; these metrics only scratch the edges

The more data you have, the greater the clarity of focus. This is why we don’t stick to the surface in exploring the data points that offer the most value. Two of the most important technical indicators used by savvy traders are the Relative strength indicator (RSI) and Stochastic – both offer a deeper glimpse into the soul of the stock as it were. The present reading for RAD 14-day RSI is 41.12%. What does this mean in real terms? A RSI reading at that level suggests that RAD is neutral, suggesting that the stock is relatively stable and may possibly stay in situ, moving neither up or down in any meaningful or dramatic way. The stochastic reading is a sort of tag team partner for RSI. Usually they speak the same language in terms of telegraphing upside. For RAD, the stochastic reading of 24.64% suggests that the stock is oversold at current levels. RAD and its upside, of course, can be judged by tacking on even more salient technical data points. We are thinking here about the always-used statistical moving averages – namely the 50 and 200 SMAs. RAD, on the strength of its moving averages, appears to present a sentiment worthy of being called bearish. And as go the sentiment around the SMAs, so goes the upside potential of the stock. In this case the sentiments appear to be negative.

What do you think of the trading picture so far for RAD? A strong picture has really taken shape we think; but we are not finished yet. There are still a few other technical data points that can really drive the point home. RAD’s -0.59 has now created a much more confident set of data upon which traders can rely. This reliance is so pronounced that we can make a judgment that overall sentiment is now negative. This is hardly surprising for RAD because further analysis reveals that the stock has actually underperformed the S&P 500 by -79.51. As a result of this performance the stock is now offering higher volatility levels when juxtaposed with similar stocks in its native sector. Based on the overall readings, historical volatility has placed RAD in the front row for many traders. Again, this is hardly a shocker given that historical volatility for RAD is 87.33%. RAD is no slouch on the measure of the Average True Range, either. ATR, as you know, simply cannot be ignored in assessing a stock and RAD offers a very clear reading with an ATR reading of 6.97. RAD based on those readings, offers a very compelling picture. Traders can use this composite trading posture and make sound choices going forward. We hope you make good use of them.