RMED broke from its near-term falling wedge (originating from mid-March) today. The stock has an intraday range of $0.10 (0.29-0.39), its largest since that mid-March period.
RMED has demonstrated a narrowing trading range and constricted volume in recent days and weeks. These are signs of peak pattern contraction we see before a breakout occurs.
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What’s Next for RMED?
So is a big payday on the horizon for RMED? Three is likely a good money-making opportunity here, but it may still be a few weeks at least. To gain steam right away, the stock needs to clear its 50-day moving average resistance at $0.40, which coincides with the 50 equilibrium level on the daily RSI.
It is possible, with enough volume, that the stock could short squeeze sooner than later. Mid-day today, there is nearly 8 million in volume, which is much higher than typical trade. To really move, the price needs to clear $0.40 and then move through the resistance around the $0.70 gap down from early February when the company announced an offering. That gap was filled a few weeks later in early March, but the price was quickly rejected just above the gap opening.
If volume doesn’t force the action sooner, we would likely see a small shoulder pattern for a few weeks to finish out a head-and-shoulders basing pattern (indicating market indecision on whether the bottom is in).
Conclusions
A lot of day traders have likely already exited their intraday trades with a nice $0.10 scalp opportunity. RMED presents a very compelling near-term to medium-term swing play, though, with the potential targets of $0.72 and $1.50-1.90 down the road.
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