As the stock market rotates between positive and negative territory, Rite Aid (RAD) – Get report the shares were firmly in the green. The stock rose 20% on Thursday after its quarterly results.
Rite Aid is reaching its highest price since the end of April, and at one point rose more than 26%.
The company delivered top and bottom earnings for its first-quarter fiscal results, a difficult feat for retailers in the current environment.
A loss of 4 cents a share came well ahead of estimates looking for a loss of 38 cents. Revenue grew 12.5% year-over-year to $ 6.03 billion, which reached more than $ 400 million before consensus expectations.
After undergoing a reverse split just over a year ago, Rite Aid was seen by many as another retailer who would bite the dust. Perhaps it still will, but after a decent quarter, the stock is recovering understandably.
Trading Rite Aid Stock
Rite Aid daily stock chart.
Graphic courtesy of Stockcharts.com
I am not trying to argue that Rite Aid stock is a slam dunk buy from a fundamental perspective. In that light, both Walgreens (AMB) – Get report and CVS Health (CVS) – Get report It looks more attractive.
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However, from a technical perspective, there is no reason for bulls to ignore price action.
Thursday’s action is impressive as Rite Aid stocks regain 50- and 20-day moving averages and remove resistance to the downtrend (blue line). This trend has been at stake since the December highs.
What the bulls really want to see is a move over $ 15.84, which is the previous high for June. While stocks overshadowed this mark earlier in the session, a close above would be preferred.
That would put the 50% retracement to $ 16.56 at stake, followed by the 61.8% retracement to $ 18.29 and a stiff resistance near $ 18.50.
On the downside, a break below resistance to the downtrend puts the 20- and 50-day moving averages at stake. That is followed by $ 11.50 and the 200-day moving average.
If the bulls completely lose control of Rite Aid stocks and fail to hold that last support zone, it puts the March low near $ 9.25 on the table.
However, for now, look at the $ 16 to $ 16.50 area higher. Up potentially unlocks more to the upside.
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