Spartan Motors, Inc. is a market engineer and manufacturer in the heavy duty, custom vehicles marketplace.
SPAR was flagged on the stock screener today September 2, 2009. If you are trying to find stocks at there turning point, the markets last couple trading sessions may be making you anxious. As with most good trades you have to stay disciplined. To trade in the “now” and not use anticipation or emotion. If the market is in a correction you will feel that way because you can see that it is. Wait to see trading signals that this correction is over per the stock you are trading.
We may have such a trading signal to work with in SPAR. A tight stop could keep us out of trouble. Today SPAR created a double bottom. It has been in a long down trend from a June 29, 2009 high of 11.75 from a capitulation bottom of 1.31 on February 16, 2009. The closing low on that day was 2.51 a 90% swing from the low to the close…the high was 4.45 on that day. Wow.
The stock is technically a little over extended to the downside. If we calculate a 62% Fibonacci retracement from the February low to the high, we get a trading level of about 5.2772. The stock has made a low of 5.01 on August 17 and touched that trading low again today September 2, 2009 for a one minute price bar time frame on light volume.
Today the 30 min. MACD signal crossed towards the end of the trading day. The August low was significant in that it represented a completion of a ABC corrective wave. With the double bottom in place we could set up a trade using this level as a stop loss, understanding that the stock could make further significant pull backs if this level is not respected.
As long as we keep a tight stop or, wait for a retest of this 30min. MACD signal cross you could safely enter a trade with the potential of catching a turning point.