After got off to a strong start, stocks sold off sharply and closed near session lows as traders took profits following the recent stealth rally that briefly took the S&P above this year’s intraday high of 1,422.38.
Strikingly, shares of H&E Equipment Services Inc. (HEES) attracted strong buying support, jumped 6.29% on explosive volume to 18.60, after the construction equipment dealer announced that its Board of Directors declared a one-time special cash dividend of $7.00 per share (approximately 40% of the company’s closing stock price on August 20, 2012). This is bullish from a technical perspective. In fact, as the chart below indicated HEES could climb up to test the 52-week high of 21 after breaking out from the so-called bullish pennant. Just so that you know, initially profiled in our December 9, 2011 “Swing Trader Bulletin” HEES had gained more than 47% and remained well position.
The graphic below is from our “U.S. Market ETF Trading Map”, which show the near-term technical bias and trading ranges for HEES. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red. The yellow bars identify period of neutral or sideways trading pattern. Additionally, the light-blue shading represents the short-term trading range. A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading). Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.
Chart 1.1 – H&E Equipment Services Inc. (daily)
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