CoreCivic accelerating divergence, working on trend line break

26 Jul 2019

Private prisons aren't sexy, and CoreCivic has been collapsing due to negative publicity around its management of detention centers for migrant children on behalf of the US government. This, however, presents an opportunity for the contrarian investor. Despite an analyst downgrade a couple days ago from Fitch, CoreCivic has been seeing an acceleration of bullish divergence and may be working on a trendline break. This is a risky play given the negative catalysts, but there's lots of upside potential here. I find that when a stock moves in the opposite direction of an analyst upgrade/downgrade, that often means it's reversal time. I will take a small position if CXW confirms its trend line breakout.

The stock has an 8.2/10 Equity Starmine Summary Score and is rated undervalued and high quality by S&P Capital IQ.

26 Jul 2019

Nota

We are holding above the trend line. Volume isn't there, but I see some bullish divergence on the 1 minute chart, so I went ahead and took a small position.

26 Jul 2019

Nota

So far, so good. We're getting squeezed by the Hull Moving Average and the 20-hour Exponential Moving Average.

If we can close a bar above the Hull, we will probably move up to about 16.60 and test the 50-hour Exponential Moving Average. A bar close below the 20-hour Exponential Moving Average, meanwhile, might presage a fall to 16 or even the 15.70s.

26 Jul 2019

Nota

26 Jul 2019

Nota

With a bearish shooting star candlestick, a couple closes below 20-day MA, and downtrending HMA, it looks like we may oscillate down.