YRC Worldwide (YRCW) recently posted quarterly results that blew away Wall Street consensus estimates with EPS reported at $.83. The estimate was for just $.51. That news was well received by traders as YRCW gapped up and opened at 10.98 on July 29th and never looked back. After becoming overbought, however, YRCW has pulled back and is approaching that key gap support level, while also nearing its rising 20 day EMA. I'd look for YRCW to turn somewhere in this 10.98-11.14 range. Check out the chart:
Note the very strong volume to support the post-earnings move higher. Also, note that YRCW was extremely overbought with its RSI in the 70s and stochastic in the 90s just a week or two ago and the pullback is nearing trendline support, as well as both gap and rising 20 day EMA support. The recent selling has created a much better reward to risk scenario for entry into YRCW.
Happy trading!
Tom
