Prepping For a 20% Trip in Travel Centers of America

• Posted by Greg Harmon
• on September 23rd, 2014

Travel Centers of America, $TA, stock price is holding up very well in market that is pulling back. In fact as the market is selling off this stock has just been moving sideways, consolidating its latest move higher from the break out above the 9.00 to 9.30 zone in August. But there are signs that the consolidation may be ending soon. Take a look.

The chart above shows the consolidation in a descending triangle centered around 11.50. There was a failed breakdown Monday that recovered Tuesday and the momentum indicators have reset as they fall. What gives the urgency is that the Bollinger bands are now squeezing and the 20 day Simple Moving Average has joined the price. The short term trend in the stock has been higher so if it were to break the triangle then you could look for a ride higher to about 13.50. But if the momentum indicators continue to roll and the price breaks the triangle lower a retracement to 9 is in the cards. Which way will it break? I do not know, you just have to be prepared and wait and see. I guess I can do that for a possible 20% move.

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