Paul J Singh

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SGR Lookin’ Like a Dead Cat

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Paul J Singh

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Shaw Group Inc. (SGR) is a former high flying stock that seems to have lost its mojo. In July, the stock gapped up after a long uptrend, but could not hold the gap level. It now looks like the gap was an “exhaustion gap“, which usually comes at the end of an uptrend and signals a downswing.

SGR is in the midst of what could be a “dead cat bounce.” As a short play, I like the fact that the bounce towards the 50 day moving average has been on low volume. Take a look at the recent volume pattern I highlighted on the chart; lots of high volume down days sprinkled with a few low volume up days. This is a bearish volume pattern.

This is a great short play that I wish I had entered at the close today. If I see price strength on weak volume, I will likely give it a go tomorrow (as long as price does not cross the 50 day moving average without moving back down).

3 responses to “SGR Lookin’ Like a Dead Cat”

  1. The Market Speculator Avatar
    The Market Speculator

    I exited all of my long positions on strength this morning. I’ll post the details later today.I also took a position in GMCR and DSD (short S& P).

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  2. Anonymous Avatar
    Anonymous

    Do you have any idea what you are talking about. Why don’t you do a periodic review of your “predictions” and present some statistics. Like how often did you get it right, and how often did you get it wrong

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  3. The Market Speculator Avatar
    The Market Speculator

    Anonymous,The chart analysis of SGR was not a prediction. At any rate, SGR still has not done anything to negate my analysis.You are welcome to do a periodic review of my trades. I think you’ll find I’m doing quite well.

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