Don't Ignore This Chart!

Hasbro: The Force is Strong on This One


Star Wars fans may remember that quote from Darth Vader in Star Wars Episode IV (A New Hope). In any case, it came to mind when looking at the chart for Hasbro, which holds the merchandising rights for Star Wars toys. I see three reasons to be bullish on the price chart and expect higher prices in the coming weeks. First, the overall trend is up as the stock hit a 52-week high in July and held the support zone in the 70-72 area in August. Second, the stock is recovering nicely after the August plunge and moved above its early September high today. Third, the two biggest volume bars of the last three weeks were on up days. This suggests more interest in buying than selling. There is a fourth reason to be bullish and I will show it on the second chart (after the jump). 

I am also bullish on Hasbro because the stock shows relative strength. The indicator window shows the HAS:SPY ratio moving higher since April and hitting a new high this week. This means HAS is outperforming SPY and showing relative strength. Honing in on recent price action, I am also seeing a gap surge in early September and a small flag last week. The stock is breaking flag resistance today and this puts HAS on course for a new high. I am marking first support at the flag lows (74). 

Thanks for tuning in and have a great day!
Arthur Hill CMT

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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