Another of the stocks I monitor regularly is The Goodyear Tire & Rubber Company (NASDAQ:GT), and in post on August 6th, I suggested this stock was set for further declines. And yesterday’s price action has done nothing to change my view as GT closed gapped down on the day at $11.92 per share.
Yesterday’s price action was also significant as the price broke away from the congestion at $12.50 and which now presents a barrier of resistance to any recovery. In addition, and to add further to the bearish sentiment, a low volume node is immediately ahead at $11.50 with the trend monitor indicator confirming the bearish picture.
To find out where the stock is heading longer term, we need to consider the monthly chart, which looks ominous. However, the chart is also highlighting GT is likely to rebase around the $9 per share level in due course with a possible test of the $8.53 low last seen in 2011. The all-time low is $3.17 which, at the moment seems an unlikely target in the short term.
For longer-term investors looking for an opportunity this stock will require patience, as GT is set to fall further before an extended consolidation phase develops in the $8 – $9 price region and provided we see active buying by the market makers at these levels followed by a successful low volume test recovery should follow. All of which is likely to take months, and as always Wykoff’s second law of cause and effect will dictate the extent of any recovery. In other words, the longer GT is in consolidation, the more sustained will be the recovery.
Goodyear Tire Set For Further Falls
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