KCG (NYSE:KCG)sells off sharply, targets $10.5 soon
Denver, CO, 07/08/2013 (Avauncer.com) – KCG Holdings Inc. (NYSE:KCG) (Closed:$11.16, Down: 8.37%) confirms its major bear trend once again by breaking out of a 6-month range on the downside last week and beginning a fresh trending move. This is a clear sign of unhappy investors unloading the stock.
After making a bottom around $8 in November 2012, it rallied sharply with the broader market to $13. The price stalled there in a narrow range for a few weeks before a failed attempt to go higher. The failure at $13.5 took the price to $12 fast and created a broader range of $12-$13.5. The lower boundary of this range was breached twice last week and the stock ended the week at the lowest point. The volume of 1.4 million was slightly above average but not nearly high enough to expect a panic bottom.
The range of $1.5 gives us a target of about $10.5 which also coincides with the gap support of $10.5 – $11. So we can expect a temporary pause there, at least. But any pause would not be sufficient for a reversal. On the contrary, the downside break of the range shows the inherent weakness of the stock.
The Bollinger Band has exploded after making a narrow range along with the price for last few months. The directional indicator ADX has reversed to the upside and with a value of 28, it emphasizes the trend strength.
In a trending market, range indicators like Stochastics are of no use. MACD has entered deep into the negative zone. RSI entering the oversold zone is no consolation too as it can remain there for a long time. The quality of the fall gives the impression that the stock has a long way to go down yet before we see any sign of bottoming out. Any counter-trend rally would get sold off from the supply zone of $12 – $12.5.
A failure to mark time near $10 – $10.5 could take KCG to a new 52-week low very fast, perhaps within next few weeks.DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. - Contact us at support @ avauncer dot com if you have any questions or comments.