After looking at all of the evidence and how far down it had traded from highs in 2000, I concluded that the stock was in serious trouble and should be left alone by anyone other than short term traders.
All in all, right now, on all but the lowest time frames, RSH stock hasn’t put in anything that even remotely resembles a reversal pattern. And because of that, if you are a longer term contrarian trader, I would still say wait. After all, if your time horizon is years, and you are looking for thousands of percent, what’s a few months?
Well, it appears as I was right, given that the company itself announced recently that it’s own stock is worthless.
You can still buy shares in the bankrupt retailer RadioShack, if you really want, but even the company will tell you there really isn’t much point.
More than 1 million shares of RadioShack stock traded Thursday, closing at 18.45 cents. It went as high as 37 cents in the last month.
But the company, in a statement Thursday, stressed that its stock will have no value at all at the conclusion of its bankruptcy proceedings.
Always remember, the chart never lies. It might be a little unclear, or you might have to really do your homework to see it, but it’s always there. Also remember, don’t ever marry low priced volatile stocks.
Yes, you can make some great returns very quickly, but you have to be ready to drop them at a moment’s notice.
For the rest of the Radioshack story and the RSHCQ pink sheets chart, visit CNBC.