This Pawn Star Is Ready to Break Out

EZCORP (EZPW) operates a chain of pawn shops in the U.S., Canada and Mexico, providing loans collateralized by personal property and selling forfeited and used merchandise. It is a small-cap company in a business that makes it the perfect contrarian indicator for the market and the economy. It has underperformed the S&P 500 index by 336% since its 2011 high. If this inverse correlation continues, however, it might not be good news for the broader market, because EZPW shares look ready to break out of a major consolidation pattern.

The weekly chart shows the stock pulling back from the 2016 rally high in November and retracing nearly 50% of the move. This year it has traded in a $2 range between $9.50 resistance and $7.50 support, forming a W basing pattern. Last week, it moved back to the upper boundary of the pattern and closed over its 40-week moving average. A W channel breakout looks imminent and the pattern projects a large-percentage move higher....182 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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