Tasers Set to Stun

• Posted by Greg Harmon
• on May 19th, 2016

Taser ($TASR) had a long run lower from a high in June 2015. Now two weeks away from June a year later, it has started a recovery, but is stalling. Like it ran into a zap from one of its own products. Is this a lethal blow or was the Taser just set to stun and this is a pause before more?

The chart below suggest that it is the latter. After the move off of the January low accelerated with a gap up, the price action paused. It slowly walked back lower, filling that gap before the price turned back higher at the start of May. The steps higher moved right back to that resistance.

The candle Wednesday, a Shooting Star, is what garners attention. It is a possible reversal candle if confirmed by a lower close Thursday. Traders will focus on this as a bearish signal. But it does not have to confirm. And if it does confirm then it may complete the down move in 1 day.

The rest of the chart is much more positive. The long candle higher Tuesday put the price over the 200 day SMA for the first time since August. The momentum is strong with the RSI in the bullish zone and rising. The MACD is rising as well and positive. The Bollinger Bands® are opening higher. There is plenty of fuel for a move higher as well with almost 19% short interest. These all suggest that this is just a stall. A bull flag building perhaps. The Taser has just been set to stun.

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