Volkswagen : Quick Look For “The Greg Carrasco Show” Saturday September 26, 2015 AM640

Sep 26th, 2015 – 1 Comment

Bad decisions = bad outcomes for investors


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This is a quick look at Volkswagen for my pal Greg Carrasco who invited me to contribute to ” The Greg Carrasco Show” on AM640 Saturday September 26 9:00 am to 11:00 am. I will be discussing Volkswagen starting at 9:30 so please join us for a good go at this beaten down stock.

VOLKS

What is observable is that there were technical signals that selling pressure was mounting. First there was the 50-day moving average in May followed by the breach of the 200-day moving average in July and finally a death cross that surfaced in early August. All these patterns did not bode well for investors.

What the research also identified was that there were short positions on the stock as a hedge against a convertible bond issue. The gap down on the reveal of the tampering with the emissions system on the diesel engines gave rise to a substantial sell off. The bounce that we saw starting on Wednesday September 23 was most likely short covering and once that bit of buying was exhausted the stock looks to be setting up a retest of the 52-week low of $24.40

 

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