GNC a Speculative Short

Vitamin supplement retailer GNC Holdings (GNC) has been trading in a wide consolidation channel for the last four months. It has failed to retake the upper end of the channel this month and looks like it is preparing to retest the lower end and its 200-day moving average. On Aug. 16, Deutsche Bank downgraded GNC to a Hold and cited "aggressive" insider selling by it chief executive officer and this month the CEO sold an additional 50,000 shares at $40.51 per share. There is a 13.6% short interest in the stock.

The first daily chart shows the sideways consolidation, which has reverted around the 50-day moving average. During this period stochastics has accurately measured oversold and overbought levels and is currently moving out of its overbought zone. The moving average convergence/divergence indicators reflect the weekly and daily timeframes and both are in bearish divergence to price. Volume is weak and, while Chaikin money flow is positive and above its 21-period average, the Chaikin oscillator, a faster measure of money flow, is crossing below its 21-period signal line....151 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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