Reliance Steel - Trend Day in May   Wednesday, May 26, 2010
By Gibbons Burke
 Reliance Steel (a href=http://quote.morningstar.com/stock/s.aspx?t=RS target=_blank>RS) shares rallied relatively strongly on Tuesday, gaining 2.1% in a 'trend day' pattern move which caused the stock to cross back above the 200-day average price. A 'trend day' occurs when the stock opens the trading day in the lowest 20% of the high-low range of the day, and closes in the upper 20% of the range. The stock closed on Tuesday at $44.29, and the five-day rate of change is still negative at -1.6%. Q: How has RS performed in the past when it has seen a 'trend day up' pattern in the month of May? A: According to the 20 previous occurrences of this event, EventEdge indicates that RS has shown a somewhat bullish edge that peaks 23 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, 25 May 2010) is Friday, 25 June 2010. RS rallies in 85% of the cases (17 of 20) by an average of 10.4% relative to the close on the event date. The average of the 3 declines is -6.0%. The overall return of the 20 cases is 8.0%, which, based on the close of RS on the event date ($44.29), provides a target price of $47.83. Click here to investigate this trading idea further in EventEdge®.
You can see on the chart below that the stock is near major trendline support...
 Gibbons Burke is editor of MarketHistory.com.
 |
| | Let variable values:
@ = GII.RS.NYSE
theEvent = IF {
(High of @ - @) is less than (0.2 * (High of @ - Low of @))
AND
(Open of @ - Low of @) is less than (0.2 * (High of @ - Low of @)) }
AND
Date is May
THEN 1
ENDIF
Date Day t t+5 t+10 t+15 t+23
05/09/1995 Tue 1.0 5.8 0.0 3.9 11.7
05/30/1995 Tue 0.9 5.6 6.5 1.9 11.2
05/07/1996 Tue 2.7 8.4 22.2 28.9 27.1
05/24/1996 Fri 3.0 10.5 3.6 9.4 5.8
05/12/1997 Mon 2.3 4.5 5.6 11.3 17.7
05/30/1997 Fri 2.1 3.4 7.9 5.5 6.0
05/05/1998 Tue -0.5 2.4 -1.1 -3.5 0.9
05/04/1999 Tue 3.9 5.1 5.1 2.1 2.1
05/02/2000 Tue -0.8 -1.4 5.2 -4.4 -9.6
05/18/2001 Fri 2.9 -2.8 -2.3 -1.4 0.5
05/02/2002 Thu 3.3 -0.9 1.1 -0.9 -3.7
05/02/2003 Fri 1.4 4.8 3.3 2.8 16.4
05/20/2003 Tue 3.2 4.2 13.3 13.9 17.6
05/18/2004 Tue 6.4 7.4 6.6 4.8 9.3
05/16/2005 Mon 2.7 9.1 7.0 9.8 13.8
05/30/2007 Wed 1.0 0.9 -5.7 -4.1 -4.8
05/05/2008 Mon 3.0 1.0 6.2 4.3 7.8
05/28/2008 Wed 3.5 -0.9 -1.0 7.6 13.5
05/04/2009 Mon 5.5 -6.3 -6.5 -2.4 4.3
05/18/2009 Mon 8.4 4.4 11.9 19.5 11.6
05/25/2010 Tue 2.1 NaN NaN NaN NaN
Avg 2.8 3.3 4.5 5.4 8.0
AvgPos 3.1 5.2 7.5 9.0 10.4
AvgNeg -0.6 -2.4 -3.3 -2.8 -6.0
PctPos 90.5 75.0 70.0 70.0 85.0
PctNeg 9.5 25.0 25.0 30.0 15.0
Maximum 8.4 10.5 22.2 28.9 27.1
Minimum -0.8 -6.3 -6.5 -4.4 -9.6
StdDev 2.1 4.3 6.7 8.4 8.9
ZStat 1.3 0.8 0.7 0.6 0.9
Variance 4.5 18.3 44.4 70.6 78.8
21 Occurrences | |
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