Pay Day Lenders Are Running Out of Cash

• Posted by Greg Harmon
• on September 20th, 2011

Within the financial sector there have only been two places to put money to work and one of them has been the group of Pay Day lenders, Cash America international ($CSH), EZCORP ($EZPW) and First Cash Financial Services ($FCFS). But these stocks are starting to show signs of tiring and a possible pullback. A good sign if you have missed this run and are waiting for a pullback to get into these names and a sign to protect if you are already in them. Lets take a look at the signs.

Cash America International, $CSH

Cash America International, $CSH, has had a long uptrend followed by the pullback all stocks saw in early August. Off of that bottom the Andrew’s Pitchfork has been a very good tool to use for trading the stock, as it bounces between the Lower Median Line and Median Line. As it has crossed the Median Line it is having difficulty moving away from it and in doing so is creating a expanding top the last three days. It also has the Relative Strength Index (RSI) rolling lower and the Moving Average Convergence Divergence (MACD) indicator starting to fade. Both support a move lower. Watch for a break of the Median Line for a pullback to begin.

EZCORP, $EZPW

EZCORP, $EZPW, had the same pullback but has not risen quite as fast. It approached the Median Line of the Pitchfork in early September but is now being attracted back to the Lower Median Line. It also printed a bearish Dark Cloud Cover candle pattern that signals a reversal if confirmed lower. The RSI made it over 50 but never back over 60 into bullish territory and is struggling to hold 50 now, while the MACD is slowly falling back to the zero line. Finally the 50 day Simple Moving Average (SMA) is rolling lower and about to cross down through the 100 day SMA. Look for a move below the 100 day SMA to confirm a pullback in motion.

First Cash Financial Services, $FCFS

No Andrew’s Pitchfork here, but a simple expanding wedge top. There is a strong uptrend but it is now more than 11% over the 50 day SMA. The RSI is starting to rollover and the MACD has started to move lower the last 4 days. A break under 50 would confirm a pullback in motion.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

blog comments powered by Disqus