Chart of the Day: United Rentals Holds the Large Gap
A huge gap higher in the stock of United Rentals ($URI) following earnings was expected to perhaps close. After all, the stock rallied some $200 following a very strong earnings report two weeks ago, when it seemed as if URI had gone too far, too fast. But that hasn’t been the case, and when we examine the technical picture we can understand why.
The indicators had been building momentum for weeks. Even the price chart, which had turned bearish in February based for a month and turned cautiously bullish just before the earnings print. MACD had signaled buy much earlier too, while the relative strength was making higher highs and higher lows.
The technicals, collectively, send a very powerful message if you’re not biased. The ADX, for instance, is trending higher, telling us the current trend is powerful. After a brief consolidation in this higher price zone we look for higher prices as long as the low from the breakout day of $935 holds on a close.
We like United Rentals in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
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At the time of publication, TheStreet Pro Portfolio was long URI.
