Exploring Broadcasting – Radio

Here I will attempt to highlight another way to use the industry performance information to try and find actionable stock ideas.  Today I will be focusing in on the Broadcasting – Radio industry.

I have specifically chosen this group due to it’s weekly performance (bad) and it’s overall standing (14/207…i.e. good/great).  To me, this signifies a group that has experienced a pull-back from a place of strength relative to the general market and could be setting up to move higher.  In a market where the prevailing trend is murky (at best), you need to be diligent in your stock selection process, focusing on shorter term speculation in order to select the best stocks from the best performing industries.

After eliminating stocks with a low average daily volume (< 50k shares), my initial foray into the group starts with a scan of the weekly charts.  Here, I’m looking for stocks that are in, what I would consider, an uptrend.  This is determined by two factors:

  1. The 4, 13, and 26 week MA’s are in the following order: 4-13-26, 13-26-4, 13-4-26
  2. The 40 week MA has a positive slope

This distillation process yields the following stocks: $SIRI, $ROIAK, $CMLS.  Let’s take a look at the daily charts from these three stocks:

$SIRI

$ROIAK

$CMLS

From these three stocks, you can three different situations developing.  $SIRI expereinced a significant dip over the past week and has started to rally a bit.  I’m not a huge fan of this rapid type of pullback into a recovery.  Often I have found that the stock will revisit the prior swing lows, and I don’t find the risk/reward to be very favorable.  I think that $CMLS looks like crap and would wait before making any sort of decisions (likely: none).  On the other hand, $ROIAK has maintained it’s form since mid-late April and looks poised to move higher if it can clear 3 bucks with any sort of conviction.  I’m not a huge proponent of breakout trading, so if this stock does move through 3, I would likely wait for a correction before trying to get in.

I hope that you found this brief example helpful in providing yet another angle for utilizing my daily industry performance data.  Feel free to comment with any questions/thoughts that you may have.  Thanks for reading.

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