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RVBD at Key Resistance

Trading ranges or channels tend to stay in effect until, well, they’re no longer in effect.  One name right now caught between support and resistance [1] is RVBD.

This computer hardware maker rallied huge from last summer into the first part of 2011, and has since then been basing in a high channel.  Rallies to resistance have predominantly been sold, while pullbacks to support have consistently been bought during this time.  That’s the routine for a channeling stock [2].

With the stock currently at the top end of this range, you have to wonder if this is an opportunity for a downside reversal (particularly with the broad market short-term overbought), or perhaps a breakout failure and a subsequent pullback into the lower end of the range.  No predictions, just an observation.

Here’s a look at RVBD, showing the trading range it has spent essentially 6 of the past 7 months inside of, with the only time outside the range between mid-Feb to mid-March:

rvbd-06302011 [3]

Chart courtesy of TeleChart [4]

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast [5]

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