Serge Berger is the head trader and investment strategist for The Steady Trader
. Sign up for his free weekly newsletter . Dollar Thrifty Automotive Group
(NYSE: DTG ) – The car rental company was in the news yesterday as Avis Budget
Group (NASDAQ: CAR ) dropped its bid to acquire Dollar Thrifty due to current
market conditions. This leaves Hertz Global Holdings (NYSE: HTZ ) as the only
bidder. CAR and HTZ surged on the news, while DTG traded fairly flat on the day.
What caught my attention was the clear trend on the DTG weekly chart coupled
with the "wedge" on the daily chart. The weekly chart shows the sturdy
uptrend from 2009 is still in place, albeit a little steep. The stock has,
however, corrected nicely off the June highs and currently sits right at the
uptrend line. The daily chart is where the real juice sits. DTG currently trades
right between its 50-day and 200-day simple moving averages (200-day SMA is the
lower blue line). And more importantly, note the tight wedge pattern (white
lines). The stock price is essentially wedged between two significant moving
averages and near-term trendlines. A solid daily close above $66.50 could serve
as a good entry point for a long-side try. Stops can be placed at $64 with a
first profit target near $71. Alternatively, a solid daily close below $61 could
set up well for a short-side try. The short may be trickier, though, as long as
the 200-day simple moving average acts as support.
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