Amidst the chaos, one stock is ready to Sprint higher

• Posted by Greg Harmon
• on August 26th, 2015

The market is in turmoil. China is cutting everything they can, interest rates, exchange rates, margin rates. Major hedge fund managers are calling for the Fed to provide more quantitative easing. That 10% correction everyone has been looking for finally happened.

With all this badness in the financial world you would think there is nothing to do but sell everything and go the beach until the dust settles. But with a magnifying glass or microscope some gems can be found in this mess.

The chart above shows the price action in Sprint ($S) this year. You can see the long consolidation in a channel between 4.40 and 5.40 that culminated in a tightened range in the lower half before falling below in July. That led to a double bottom over 3.10 and a sharp leg higher. That leg stalled at the top of the prior tightened range and started to pullback in a bull flag.

A break of that flag to would target a move to 6.10. And with almost 20% of the float short a squeeze could get it there quickly. With the RSI holding strong in the bullish zone and the MACD leveling, not pulling back, during this market chaos, the relative strength is amazing. Look for a move over 4.80 as a trigger and the 4.45 area at the bottom of the Monday candlestick body and 100 day SMA as a stop, for a 3.7:1 reward to risk trade set up.

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