DataTrader: Will Coinstar Come Roaring Back?
For many traders and active investors, one of the most nerve-wracking moments in a stock’s life is when that stock rallies from bear market territory and then begins to pullback, as if on course to return back to the bear market from whence it so recently came.
This price action defines trading in shares of Coinstar (CSTR) in recent days. Although the stock’s drop of more than 7% on Friday caught the attention of traders, what may be even more noteworthy is the fact that Friday’s lower close means that the stock has finished lower for three out of the past four trading days, including the last two closes which were both lower.
CSTR moved back up into bull market territory about three weeks ago, after spending all of August and all of September below its 200-day moving average. And although CSTR has not yet retreated all the way into technically oversold territory, the last time the stock made two back-to-back lower closes was just a week ago. Shares of Coinstar rallied for three out of the four following days, gaining more than 5%.
Note that Coinstar operates self-service DVD rental kiosks, making the firm a competitor of companies like Netflix (NFLX) and Blockbuster, which is owned by DISH Network Corporation (DISH). NFLX has closed higher for three days in a row and were up more than 4% on Friday. DISH finished lower for a second day in a row, losing nearly 4% as it moved back below its 200-day moving average.
Quantified data and research on stocks like CSTR is available each evening after the market close. To learn more, click here.
David Penn is Editor in Chief of TradingMarkets.com