This has been a long time coming. I commented on the fact that RGR, specifically, was under a tremendous amount of distribution in late October, stating that the stock was due for an 80% drop in 12-18 months. That distribution turned into unmitigated panic selling today, as both RGR and SWHC saw some enormous volume selling that took both companies down significantly.
It wasn’t the fact that RGR saw its biggest volume down day in years today alone, however, that has finally put a lid on the stock. It was also the fact that its primary trajectory served as the point where the acceleration took place. A gap below the primary trajectory that occurs on above average volume and ends on its lows, following a distribution pattern of some months, is an extremely high percentage pattern. Not only that, it is a pattern that is prone to significant destruction in shareholder equity over an intermediate to long-term time frame.
RGR has seen its best days. The bears are now 100% in control, with nefarious intentions for the share price.
Here is the technical look, starting with a long-term view to demonstrate the enormous downside volume today, followed by a short-term view to demonstrate a violation of the trajectory:
click chart to enlarge