What does The Reject Shop Ltd do?
The Reject Shop Ltd [ASX:TRS] is a discount variety retailer of general merchandise products, serving a broad range of value-conscious consumers who are attracted to low prices and convenient shopping locations.
In the half yearly report, released mid-February, managing director Ross Sudano, was upbeat and said, ‘sales improvement at the end of the first half of the financial year, was continuing into the second half.’
That may be, but what is the chart telling you?
What is the chart telling you?
I personally find it helpful to bring up a chart. Here’s the monthly chart of TRS:
The stock has been in a steady downtrend for a year and a half and in today’s trading it was breaking the previous lows. While the company is forecasting sales improvement for the second half of the financial year, the chart does not give us the same optimism.
What now for TRS shares?
If it’s breaking the previous lows it might suggest there is still a little way to go for the company to turn things around. Let’s wait and see.
The release of the half yearly report mid-February caused a flurry of buying shown by the big up bar for that month. However, the trend had not changed. Don’t be in a rush to pick up a bargain. As I have stated before, the problem with trying to buy stocks cheaply is they can become even cheaper.
Wait till you see a change in the longer term trend, a higher bottom on the monthly.
Use the charts to guide your investment decisions. With a little charting knowledge you will know how to apply your risk management to incur better benefits. Go here to find out more.
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