The Garbage Trade
- Posted by Greg Harmon
- on October 17th, 2012
Covanta Holdings, $CVA, reported earnings Wednesday night, meeting the street expectations on EPS but light on revenue. I like this stock because it is a good old fashioned business, garbage collection and headquartered about 10 miles from where I grew up in New Jersey. But those are not reasons to buy the stock. What makes it interesting to me is that the stock broke a range between 16.80 and 17.75 during trading Wednesday and has held the bid after reporting, although little has traded. It has a Relative Strength Index (RSI) that is bullish and rising and a Moving Average Convergence Divergence indicator (MACD) that is positive and growing. It is also trading above its
Covanta Holdings, $CVA
50, 100 and 200 day Simple Moving Average’s (SMA). Translation: The technicals support further upside price movement. The target on the break of the channel is a move to 18.70 first and then a Measured Move to 19.20. But glancing at the 3-box reversal Point and Figure chart, it has a much higher price objective of 27 on a triple top breakout. Use the top of the previous channel as a stop in case of a false break out and enjoy the ride.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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