Chart of the Day: United Rentals Finds Support After Nasty Downturn
The stock recently fell from all-time highs but found buyers at a key level.
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After pushing higher following strong earnings and guidance we saw the sellers hit United Rentals (URI) pretty hard last month, with heavy volume to the downside and follow through.
That nasty downturn corrected the recent up move as buyers just were not interested in adding URI above the $1,000 price level. But, after a 20% correction (we won't call the stock in a bear market though), United has found some solid support at the 200-day moving average.
That level, around $782, held firm a couple weeks back as it appears the last of the sellers finally hit the exit door. That's good, setting up a spot for dip buyers and "strong holders" to add more shares, believing the 200-day moving average stays firm. Parabolic stop and reverse (SAR) remains bullish.
The indicators are mixed, with candles showing purple colors. That is bearish on the GoNoGo composite of indicators. The ADX is soaring, which means the trend is strong to the downside, picking up steam from the intense selling in November. This is likely to come down in days. MACD is on a buy signal.
If we can just get a bit more sideways action into the new year, it would set up a nice move higher into the next earnings call in late January. On support, this might be a good spot to add more shares of URI.
We like United Rentals and rate it a two, stockpile on pullbacks.
At the time of publication, TheStreet Pro Portfolio was long URI.
