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Corrections Corporation of America Message Board

  • GenJackripper GenJackripper May 13, 1999 4:47 PM Flag

    Will June be bustin' out all over?

    sumaojl has held bullish expectations for the
    merry, merry, month of May, while the General has been
    eyeing the month of June.

    Being the
    obsessive/compulsive that Cleo labels me as being, I found it
    desireable to calc PZN's 50 DMA a few weeks ago. Having done
    that, it was noticed that when PZN exits May, the
    trailing portion of the 50 days' worth of closing prices
    will enter a bowl shaped trough or crater wherein
    PZN's closing prices fell below $19, getting down to as
    low as 4/07's and 4/09's 16.375. The historic period
    I'm referring to was 3/22/99 through 4/19/99,
    encompassing a total of 20 trading days, or almost enough to
    last through the month of June (June has 22 trading
    days).

    For those who care to see the graphical
    representation of what I've been describing, look at PZN's big
    3-month chart here on Yahoo for the historical period
    cited above and the archive of "daily" stats for the
    closing prices.

    Now I am not saying that charts
    are a predictor of future stock prices, although I do
    regard certain patterns and movements as indicating
    likely "trends," and I realize that what I'm about to
    point out is a bit of the tail wagging the dog, but
    here is the point of the foregoing preamble.

    At
    the moment, PZN appears to be executing a 50%
    retracement of its run from 4/12/99's intra-day low of
    16.1875 to 5/11/99's intra-day high of 22.375. That 50%
    retracement level is 19.28125 (19 9/32). That level is
    slightly more (about an 1/8 of a point more) than where
    PZN's 50 DMA was sitting as of today's close
    (19.14000).

    So, PZN would essentially be sitting on its 50 DMA.
    It can, to all intents and purposes, maintain a
    "positive" technical track remaining close to, but
    nevertheless ABOVE its 50 DMA by doing nothing better than
    tracking sideways (neutral, flat), pricewise.

    That
    is, until the end of this month. At that time, while
    the then current day's closing price will be ADDED to
    the 50-day tally, the (increasingly) smaller tail-end
    day's closing price will be SUBTRACTED from the
    list.

    The net effect of the foregoing will be that, even if
    PZN's prices, near-term, were to stay "flat," ITS 50
    DMA WILL BEGIN TO RISE. Inorder for PZN to remain
    ABOVE its (now) rising DMA and continue in a
    technically positive mode, it doesn't have much choice as to
    what it's gotta do. It can't afford to just mark time
    or dawdle any longer, IT'S GOTTA RISE,
    TOO!!

    A case of the tail waggin' the dog? I guess we'll
    all have to wait and see.

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