GROW Chart Discussion, Is the Stock Done Growing?
Check out this chart of U S Global Investors (GROW) and you can see a splitting image of beauty. Look back at the stock’s original breakout at $35 (first blue box). You can see the high volume gap which started it all. And, not even two months later the stock was trading above $70. Next check out the channel it formed as it was shooting into the sky designated by the two green diagonal lines. As you can see simply playing the channel as it was going up could have yielded strong returns.
But yesterday, the stock broke the upward channel it had started back in November, and also had a distribution day on heavy volume. If you were long up until this point, getting out of the rest of your position with yesterday’s distribution and channel break wouldn’t be a bad idea (assuming you already have taken profits somewhere along the lines). Today the stock has already tested $60 support, and you can see the stochastic along with the MACD are both at levels that haven’t been seen since November.
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