Today’s title is brought to you by Brooke Thackray, who is not just a good research analyst, but a master of sarcastic wit at times. He emailed me this short comment this morning.
Its always interesting to see the reflection of human emotion and how it plays out on the stock markets. Technical Analysis is actually a form of Behavioral Finance, particularly when it comes to the usage of analytical tools like sentiment indicators. But you can also see crowd behavior and emotional response to current events in sector rotation. Witness the recent rally in gun-related stocks, security, and law enforcement tool manufacturing.
I thought it might be interesting to take a look at these movers, and then to surmise if any of these stocks are worthy of a longer termed play. While the Floyd riots are in full play, it might be expected that these stocks will be forefronts of investors minds – and they can be expected to stay strong. What happens after things settle down is the question. Lets take a look at a few of these stocks with a mid-long termed technical perspective.
Smith & Western
SWBI is an iconic firearms company. Its hard to walk into novelty t-shirt store without finding numerous references to the brand. The chart shows us that a longer termed downtrend may have turned the corner with the recent riot-inspired rally. Continued strength in the sector will add evidence of a potential longer termed bullish move.
Gun and ammunition maker OLN has not broken its downtrend.
Sprotsmans Warehouse SPWH has really popped. Its coming into resistance near 13.50. Not enough upside vs its overbought chart to inspire an entry for my tastes.