Since CXW reached its current 52-week & i-d h of $46.29 on 1/04/06, it has been trending south and has thus far penetrated below both its 50-DMA & its 50-EMA.
The General tracks those MAs as well as CXW's 150-EMA and its 200-DMA & EMA. He expects that the 150-EMA will be penetrated shortly, possibly this coming week. The 150-EMA, a/o yesterday's close, stood @ 41.46 and had gained 27� over the past week and 15� over the 4-day trading week prior to that.
CXW's i-d l in yesterday's session dipped down to $42.01.
The General has been keeping his eye on the as-yet-unfilled 25� gap-up that was created almost 3 months ago on 11/03/05 ($40.75 --> $41.00). In his opinion, CXW's intent is to close that price discontinuity and neaten things up.
Reckoned from yesterday's i-d l of $42.01, CXW would require a further decline of -2.40% to begin closure and -3.07% to complete it. Completing it in the very near future (a week or two) should take CXW fractionally below its current 200-DMA & EMA, which happen to be at the same value of 40.83. Why should this happen if, in fact, it does happen? Some 'rationalistic' readers here may ascribe it to Mr. Market, or perhaps what 2/09/06's earnings release may disclose. The General is more pragmatic. Far more often than not, price discontinuities (gaps, whether up or down) do (eventually) get filled.
For those who still crave a reason, the General will paraphrase the reason that William Jefferson Clitman gave for his closing the gap with Monica Lewinsky.
General - Brutal! No more gap filling, please! Unless you go back a decade and catch some of those big gaps we saw on the way down - before the 1 for 10 RS. Looking like your recent forecast is coming to pass. Let's get it over with before the CC next Thursday, so some "good news" can be put to good use. Still a "Buy" tho' IMO. tt99
tt99, while the General suspects that there's a bit of your tongue in your cheek in describing a stock's retreat inorder to fill a gap-up as, << Brutal! >>, to the General it is just a customary bit of "housekeeping."
It's ALWAYS nicer when the gap gets filled shortly after its creation and the stock can then proceed with its 'life', but Mr. Market occasionally doesn't oblige us that way. Look at it this way, a three-months wait for closure is still better than a three-years wait (which can also happen). Yeah, a three days or three weeks wait would've been better, but in view of the fact that you and this stock go back at least a decade, three months is 2.5% of that total period.
In the General's opinion, CXW's gap-closing intentions were telegraphed a bit more clearly today, when its i-d l dropped below the $41.87 that it set on 12/20/05.
Reckoned from 41.75, CXW has a further decline of -1.80% to begin closure and a -2.40% to complete it. A further total drop of a point within the remaining 5 trading sessions (until earnings are reported before the opening on the 9th and the CC occurs that morning) seems doable to the General, but none of us can really control CXW's time-table.
If you (and others lurking here) truly believe that CXW is a "Buy" in this price area, and CXW closes the gap, it's provided buyers with an idea of what they could purchase some for.
There's no reason, of course, why CXW's gap-closing run couldn't have inertia that would take it well below $40.75. One never knows for certain about these things. And there could always be something untoward revealed next Thursday.
The General has been informed today, by his T/A, the Oracle at Delphi, that CXW's uptrend line is in the $37 area (the General has not independently confirmed the UTL more precisely), so it could conceivably not find support till that level. But the General's Ouija board, the tea leaves remaining at the bottom of his cup, AND his kishkes, are not indicating that significant a drop below closure level.
One way or another, we should have answers by the end of next week.
To paraphrase Tevye, the milkman, in FOTR, you've waited this long, tt, so you'll just have to wait a little longer. <g>