Time to Reload the Guns

• Posted by Greg Harmon
• on May 10th, 2012

Gun stocks had a spectacular run higher before they got short down after Sturm Ruger, $RGR, reported earnings. Now having pulled back it is time to revisit them.

Smith & Wesson Holding, $SWHC

Smith & Wesson Holding, $SWHC, got hammered on Tuesday, falling from a bull flag, but found support after closing the gap from the flag between 6.75 and 7.05 from mid March. A move higher Thursday supported by a rising Relative Strength Index (RSI) may be the all is clear sign. Look for a move higher Friday to trade long against a 6.75 stop.

Sturm Ruger, $RGR

Sturm Ruger, $RGR, has had a steady pullback since reporting earnings May 1st. That pullback found support at the 50 day Simple Moving Average (SMA) printing an Inverted Hammer reversal candle Wednesday that was confirmed higher Thursday. The RSI is rising here as well to support continued upside. Definitely worth considering as a trade against the 50 day SMA as a stop.

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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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