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October 9 Chart of the Day - Ruger

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Sturm, Ruger & Co., Inc. (RGR) is one of the nation's leading manufacturers of rugged, reliable firearms for the commercial sporting market. With products made in America, Ruger offers consumers almost 800 variations of more than 40 product lines, across both the Ruger and Marlin brands. 

The monthly chart for Ruger could be described as "a bunch of lines and confusion..."

So whenever this happens we'll drill down a time frame or two and see if anything interesting presents itself.  And in this case it does.

Down on the weekly chart we can see that price may be coiling for a breakout. But in which direction?

Nobody can say with any certainty but it does seem like price has an upcoming decision to make.

With that in mind, we set out to identify potential price levels of interest in both directions using price action technical analysis tools.

$50 appears to be in the middle of a change control zone on this chart.

Quite simply, above the zone bulls control the chart and below the zone bears control the chart.

Change control zones are one of the five price action tools we teach when charting anything.  By definition, they are an area that represents where neither the bulls nor bears are in charge.  Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it.  Or, price can trade aimlessly sideways within it.  When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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