Casey’s General Stores: A stock for fence sitters

• Posted by Greg Harmon
• on January 11th, 2016

Since the post Christmas apocalypse in the stock market, participants views on the future direction of stocks seem to be more polarized and loud. Many see a market that is in for a deep correction. others point to how the economy is not reflected in the current market so a bounce back is imminent. If you can’t figure out which side of this argument to scream loudest on then I have a stock for you.

Casey’s General Stores ($CASY) is a stock that that is sitting on the fence, like you. The chart below shows the two conflicting stories. On the positive side there is the long uptrend from May that remains in place. The move lower to start the year only touched support and has not damaged that trend. The RSI has held in the bullish zone over 40 during that time too.

But there is also a bearish scenario to watch. Since making that high over 129.50 in mid-December, it has pulled back in a descending channel. The low to start the year touched the bottom of the channel and it bounced. Now it s close to the top of the channel and has a MACD that continues to work itself lower.

So which is it going to be, a continuation higher or a continued break down lower? Actually you do not have to decide. Just watch he yellow triangle and see which way the price breaks it. If it is to the upside then buy the stock to follow the continuation of the long uptrend. If it is too the downside then sell the stock short or buy put options to participate in a continued correction lower. In the meantime, feel comfortable sitting up on that fence.

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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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