The automobile rental business has had bumpy ride over the past 52 weeks. Shares of Hertz Global Holdings, Inc. (HTZ) traded as high as $22.70 on May 2, 2018, to a low of $13.01 on Oct. 24. Within this range, the stock has been above $20 per share several times between June 20 and Nov. 29 and below $14 several times between July 13 and Jan. 7. This appears to be a stock that can be traded profitably given this volatile trading range.
Despite this volatility, Hertz stock closed last week at $18.77, up 37.5% so far in 2019 and in bull market territory at 44.3% above its Oct. 24 low of $13.01. The stock is also in correction territory at 17.3% below its May 2 high of $22.70.
Hertz operates airport services and offers truck rentals as well as fleet leasing management services. Analysts expect the car rental company to report a loss of 90 cents per share on revenue of $2.15 billion when it releases results after the closing bell on Monday, Feb. 25. Over the past two years, Hertz has beaten earnings per share estimates 38% of the time and exceeded revenue expectations 50% of the time, so let's flip a coin!
The daily chart for Hertz
The daily chart shows that Hertz stock has been below a "death cross" since April 11, 2018. This was confirmed when the 50-day simple moving average fell below the 200-day simple moving average, indicating that lower prices lay ahead. This tracked the stock to its Oct. 24 low of $13.01.
The close on Dec. 31 at $13.65 resulted in a quarterly value level of $12.29, which is below the chart, and semiannual and annual risky levels at $38.88 and $42.70, respectively, which are above the chart. The Jan. 31 close of $16.59 resulted in a monthly pivot at $16.87 for February. My weekly pivot at $19.32 should be a magnet this week.
The weekly chart for Hertz
The weekly chart for Hertz is positive, with the stock above its five-week modified moving average of $17.34. The stock is well below its 200-week simple moving average, or "reversion to the mean," at $32.60, last tested during the week of June 26, 2015, when the average was $81.07. The 12 x 3 x 3 weekly slow stochastic reading rose to 44.71 last week, up from 38.40 on Feb. 15.
Trading Strategy: Buy Hertz shares on weakness to my monthly value level at $16.87 and reduce holdings on strength to the 200-week simple moving average at $32.60. My weekly pivot is $19.32.
Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.