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Sprint Corporation (NYSE:S): Selling Pressure Expected Near $7.40-60

Sprint Corp

Boston, MA 09/19/2014 (wallstreetpr) – Sprint Corporation (NYSE:S) (Closed: 6.85 Up: 2.39%) launched three new offerings in its updated “Sprint Prepaid” plans. From the recent price action, it definitely looks like the investors thinks well of these new steps in the highly competitive prepaid market. In the last 1 month, it has rallied from the low of $5.36 to the high of $7.15, an appreciation of more than 33% with volume touching 100 million on many sessions in this period. Though on Thursday, the activity was a bit subdued despite the upmove as clearly evident from the low volume, registering just 20 million against the average volume of 24 million. Nonetheless, the daily candle closed at the high, retracing the previous two days’ loss completely and that suggests a bit of strength, though more confirmation is still required.

If the stock manages to extend the rally by breaking above $7.15 in the short term, with the huge gap between $7.07 and $6.14 already filled up completely, it would face the major supply pressure from the band of $7.40-50. This band provided a lot of support in the period of December 2013 to July 2014 before giving way to the bears. Obviously a lot of trapped buyers are waiting for the price to revert to $7.40-50 to exit the stock, at the purchase price if only to avoid the loss, forgetting all about any profit. Add to that the retracement levels with the 50% level of the fall from the May 2014 top of $9.76 to the August bottom of $5.36 coming at $7.56 and 61.8% level of the fall from the July top of $8.68 to the August bottom coming at $7.40 and a huge confluence zone is visible in the area of $7.40-60.

The price may have created a Bump & Run reversal pattern and if it can stay above $7.60 in the coming days, the stock can attempt to rally towards $8.50-80.

Published by Viraj Shah

Viraj Shah has done M.Com (Finance) and currently pursuing CFP. He is a technical analyst who tracks US markets along with other global markets like India very closely. He is very passionate about stocks and believes that money can always be made in market.

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