A Major Top

Two weeks ago I wrote a post entitled “Have the Gun Stocks Become a Bit Frothy?”. As it turned out this post probably top ticked the monster rally in the gun makers to the day – since May 1st $RGR has fallen ~21%¬†while $SWHC has fallen ~20%. Call it luck, my point in mentioning the sizeable decline in the gun stocks is not to toot my own horn but rather to highlight the textbook top formed in RGR after an unprecedented bull run during the last few years:

RGR Weekly

 

RGR Daily

It is no secret that the combination of a parabolic ascent and significant volume expansion often means the end of the run is near – remember silver ($SLV) in April 2011?

 

Distribution patterns are not only characterized by high volume, they are also volatile and wide ranging which can be seen at both tops in RGR and SLV.

 

 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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