THE TECHNICAL CASE FOR AN 80% DROP IN RGR OVER THE NEXT 12-18 MONTHS
RGR has been a hedge fund hotel of the short variety for sometime now. More than 40% of the float is currently short, which has resulted in a rather vicious squeeze to take place in 2012. That squeeze has culminated in what can be classified as a "blowoff top" that is rounding out and continues to see continued distribution, while it sits on top of a generational trajectory point dating back decades. It is a picture perfect top that deserves to be capitalized on.
Here is the first chart. A long-term look at RGR:
click chart to enlarge
RGR - MONTHLY
And this is a shorter term look at RGR via the daily chart:
RGR - DAILY
A break above 55 is where this analysis is invalidated and the trade should be covered.
