Don't Dump Your Shares of Republic Services Just Yet!
This waste and recycling name is piling up, and should keep going for a while.
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Republic Services, Inc. RSG is a big play in recycling and non-hazardous solid waste for commercial, industrial, municipal, residential, and oil field customers. I recommended purchasing the shares on Nov. 8, writing that "Traders could go long RSG on strength above $158. Risk to $149. The $179-$185 area is my price target."
Let's take a break this morning and review the condition of the charts and indicators as prices have exceeded my price targets.
In this daily bar chart of RSG, below, I can see that RSG stalled a little around the upper end of my $185 price target. Prices consolidated their gains for about three months before rallying to new 52-week highs. The slope of the 50-day moving average line is positive and so is the 200-day moving average line. The daily On-Balance-Volume (OBV) line shows a strong and bullish rise from late October. The trend-following Moving Average Convergence Divergence (MACD) oscillator corrected lower for three months before turning upward again in June.
In this weekly Japanese candlestick chart of RSG, below, I see a positive setup. Prices are in a longer-term uptrend and trade above the positively sloped 40-week moving average line. The weekly volume histogram shows good activity. The weekly OBV line confirms the price gains. The Moving Average Convergence/Divergence oscillator has been correcting but has narrowed and is getting closer to a fresh buy signal. The candles are not showing me a top reversal pattern at this point.
In this daily Point and Figure chart of RSG, below, I can see an upside price target in the $215 area.
In this weekly Point and Figure chart of RSG, below, I can see a downside price target in the $167 area. A trade at $198 would refresh the uptrend.
Bottom line strategy: Traders who are still long RSG should continue to hold those positions. Raise stops to $184. The $215 area is my new price target.
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