Sector: Consumer Goods
Industry: Toys & Games
Hasbro, Inc. engages in the design, manufacture, and marketing of games and toys. The company principally provides children and family leisure time and entertainment products and services. It offers various games, including traditional board, card, hand-held electronic, trading card, role playing, and DVD games, as well as electronic learning aids and puzzles. Hasbro’s toy products include boy’s action figures, vehicles and play-sets, girl’s toys, electronic toys, plush products, preschool toys and infant products, electronic interactive products, creative play products, and toy related specialty products.
While the rest of the market is falling to the bears, Hasbro doesn’t seem to know this. They have reached a 52 week high again! The 52 week high is a street benchmark and generates lots of technical noise. The markets scream buy 52 week highs, sell 52 week lows, and as backward as it sounds, it works. Technically, many “break out” stocks will post multiple 52 week highs on its run. A broken stock will post multiple 52 week lows on its descent.
On its weekly chart we get a very good picture of its momentum. Earlier in the year we had a long term 50 day MA pulling over the 200 day MA and this has given it great momentum. After testing the 41.6 area (its high in (2009) for a couple weeks, it finally broke through and it has moved up for the last two weeks.
Momentum should carry this stock for awhile.
Look at a an August 45 call for a straight call play on this one.
Reservations?
Insider trading.
We would be a bit worried about these figures. In the last 6 months there has been much more selling going on by insiders and institutions than buying. This is never a plus for the company. Now, since we have gone up so much, it could be everyone cashing in and trying to protect their money because of the markets volatility.
Also, mild negative divergence in the daily technicals. I do not have it shown here, but the daily technical indicators are showing a mild negative divergence lately in the RSI.
I say mild because the Stochastics and the MACD do not show this. Therefore it could be nothing more than a weak time of consolidation coming before it continues upward.
I rely more on Stochastics than RSI for divergences anyway. Look for a short term option play on this stock, we do not think it will last long the way it is going, but it has plenty of play left in it.
Get more research and trading information at EmpoweredInvestingNow.com
