Stocks will bounce back at some point. So, we decided to look for oversold companies, coiled springs that could unload if/when the market rebounds. Clear Channel Outdoor Holdings, Inc. (CCO) is one that fits the bill with its relative strength index (RSI) score of 27.35. Generally speaking, a score under 30 is considered oversold and could attract some buying.
Additionally, Clear Channel is sitting on the top of what looks to be firm technical support between $1 to $1.10. A close below a buck, and it’s time to cut losses. Now we know our downside, roughly ten cents. The communications services company trades at $1.11 as we type.
Meanwhile, a week ago, CCO was trading at $1.50. The next level of resistance, should buyers come into Clear Channel soon, is $1.30 and again at the 200-day moving average of $1.42. If we’ve made the correct call with our technical take, it translates to a minimum reward to risk ratio of close to 2 to 1 with 4 to 1 potential.
Remember, short-term trading, especially on low priced stocks is very risky. Only speculate with money you can afford to lose.
Rich Meyers
Investing Trends
