Rent-A-Center, Inc. engages in the provision of furniture, electronics, appliances, computers, and smartphones through flexible rental purchase agreements. It operates through the following segments: Rent-A-Center Business, Preferred Lease, Mexico, and Franchising.
Take a look at the 1-year chart of Rent-A-Center (NASDAQ: RCII) below with the added notations…
Chart of RCII provided by TradingView
RCII has been trending lower for the past year, eventually falling into a rectangle consolidation pattern (blue). The pattern formed a $30 resistance, as well as a $23 support, and eventually one of those levels had to break. Last week’s support break likely means even lower prices for RCII.
The Tale of the Tape: RCII broke its rectangle support. Short positions could be entered now, or on a rally back up to the $23 breakdown level. Protective stops should be set either way.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Good luck!
Christian Tharp, CMT
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