Above is a daily chart of RDW, and as you can see, the stock continues to trend higher, closing at 10.98 on an increase in volume. That’s exactly what you want to see when a stock is in an uptrend, higher prices being confirmed by expanding participation. Despite that strength, I’m staying patient here and resisting the urge to chase. With price moving closer to the $12 resistance area, the risk-reward no longer favors jumping in at these levels.
Instead, I’m focused on waiting for a constructive pullback. If you look closely at the chart, you’ll notice I have the 13 EMA of the lows plotted. This isn’t some random moving average I pulled out of a hat. Over the past couple of months, this average has done an excellent job capturing the short-term swings in RDW. In December, it provided near perfect support on the last two pullbacks, making it a level that clearly matters to the market.
Right now, that 13 EMA of the lows is approaching the $9 area, which also lines up with potential horizontal support. When multiple forms of support converge like that, it’s something I pay close attention to. That zone becomes a high interest area where I want to see how price behaves, not a place where I blindly buy.
My game plan is simple, I’m waiting for a pullback into the $9 area and then looking for confirmation before getting involved. That confirmation could come in the form of a trendline break on a lower timeframe, a bullish reversal candle, or some other clear sign that buyers are stepping back in. Until that happens, there’s no trade for me.
For now, RDW remains an important stock on my watchlist. Strong trends often reward patience, and I’m content to let the stock come to me rather than chasing it higher. Let’s see what next week brings
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