Oshkosh is at a Crossroads

• Posted by Greg Harmon
• on April 7th, 2015

Oshkosh is known for making trucks. Big trucks, for the military, airport firetrucks, massive snow removal trucks. Not something you might park in your driveway. So it was not such a bad idea to change their name from Oshkosh Truck recently to avoid mom and dad inquiring about one of their bad boys.

Still, they are heavy duty truck like vehicles, and the company is sitting at a crossroads. The chart below of the stock price shows that over the last 7 months it has moved back and forth but has always been stopped in its tracks at a falling trend resistance line. The past 6 days it has been holding at that line for the 4th time.

For a trader this presents an opportunity. Either the stock will break the resistance after all this time and continue higher, a buy signal. Or it will fail again and revert lower, giving an opportunity to sell short. Using a stop loss for either trade near the resistance line would limit risk.

This particular time, it seems to have slightly different dynamics as it reaches resistance. Each of the last 3 times the price has touched the resistance line the momentum indicators have been high, but already rolling over, starting to wane. That is not the case this time. In fact the RSI at the top of the chart is holding flat in the bullish zone, not falling. And the MACD is flat but actually crossed up and starting to rise, while the last 3 times it had been falling. This is not a reason to buy it today, but it does suggest that the 4th time may be a charm. Let price confirm…..or not, before making a move.

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