Whether They Are Pawnshops or PayDay Lenders They Are Confusing

• Posted by Greg Harmon
• on December 6th, 2011

The pawn shops were the darlings of the banking sector early this year but have taken it on the chin the back half of the year. They now show mixed pictures for the future. Will they all line up or will there be some winners and some losers. Let’s take a look at three.

EZCorp, $EZPW

EZCorp, $EZPW, is in a symmetrical triangle after falling from its high in July. It has just made its 5th touch which many believe is significant and will lead to a breakdown lower. Until it does head lower though it is also in a bull flag. The Relative Strength Index (RSI) does not give much guidance as it has been near the mid line for 2 months but technically remains bearish. The Moving Average Convergence Divergence (MACD) indicator is positive though and increasing. Watch for a break over the top rail at 29.55 or a fall out of the flag below 28.40 to determine the direction of the next trade.

First Cash Financial Services, $FCFS

The chart for First Cash Financial Services, $FCFS, also shows a symmetrical triangle, but with a fall from it lower. Since then it has been climbing higher towards the center line and resistance at 40 and building a bull flag. It has support from the increasing MACD and the rising RSI. The RSI though is leveling and still in bearish territory. Adding weight to the downside story is the topping tails on the last 3 candles. Watch this for a move over 38.50 or a move below 37.50 to establish the direction for the next trade.

World Acceptance Corp, $WRLD

Finally, World Acceptance Corp, $WRLD, has held up better than most in this sector rising back into the previous price channel between 59.50 and 68.75. It is now building a bull flag at the top rail after a move up off of the convergence of Simple Moving Averages (SMA). It has a bullish RSI supporting a break higher but that RSI is also stalling and rolling flat. The MACD is rising though and supports more upside. Watch this one for a break over 70 or a fall back into the channel below 68.50 to signal the next trade.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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