The TASR (Taser Int’l Inc) short trade hit the second price target for a 30.5% gain about three weeks ago and has been consolidating in what appears to be a bearish pennant continuation pattern since then. Therefore, a break below the pattern and especially below the T2 support level would likely be the catalyst for the next leg down in the stock and a relatively fast move towards the final target (T3 at 9.90). Note: short targets are set slight above support so give it about 5-8 cents below T2 for those preferring to wait for a break of the horizontal support before adding to an existing position or initiating a new short trade. Click here to view the live chart of TASR
TASR daily June 2nd
In addition to the potential bearish pennant formation, TASR is poised to make a rare death cross of the 50/200 day ema pair. As the 10 year daily chart below illustrates, TASR has experienced three major bull markets and two major bear markets over the last decade. Each bull market was marked by a golden cross (50 ema crosses above the 200 ema) early in the trend change while the pair also did a nice job of providing early confirmation of a new primary downtrend via death crosses (50 crossing below the 200). As with using any moving average pair or trio in helping to identify potential trend changes, crossovers on the 50/200 pair are prone to providing whipsaw signals during periods of sideways, choppy price action, such as that which followed the previous bear markets in TASR. Therefore, I typically put a lower weighting, if any, into moving average crossovers unless a clear trend has been underway.
Currently, TASR is (or recently was) in a solid & powerful bull market and as prices have been in an unmistakeable uptrend for over 2 years now, the next crossover, which seems imminent based on the downward velocity & trajectory of the 50 ema, is likely to provide a bona fide sell signal (compare the similarities to the early 2008 death cross). However, with all trends (short, intermediate & long-term) in the broad markets still bullish at this time, T3 continues to remain my final & preferred target on the TASR short trade.
TASR 50-200 ema crossover