EZCORP, Inc. provides specialty consumer financial services. The company offers pawn loans that are non-recourse loans collateralized by tangible personal property, including jewelry, consumer electronics, tools, sporting goods, and musical instruments; sells merchandise comprising second-hand collateral forfeited from its pawn lending activities or purchased from customers, and new or refurbished merchandise from third party vendors; and buys and sells second-hand goods. It also provides various financial services, such as unsecured consumer loans, including single-payment loans, multiple-payment loans, lines of credit, and payroll withholding loans; secured consumer loans comprising single-payment and multi-payment auto title loans, and auto title line of credit; and debit cards. In addition, the company offers payroll deduction loans and online loans; fee-based credit services to customers seeking loans; and advice and assistance to customers in obtaining loans from unaffiliated lenders.
To review EZ’s stock, please take a look at the 1-year chart of EZPW (EZCORP, inc.) below with my added notations:
EZPW has formed a key price level at $12.00 (blue) over the last (2) months. You can see how that level has been both a current support and prior resistance. In addition, the stock has created a down trending resistance starting from the middle of February (red). These two lines combined have EZPW stuck trading within a common chart pattern known as a descending triangle (or a pennant). At some point, the stock has to break support or break its string of lower highs.
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The Tale of the Tape: EZPW has formed a descending triangle pattern. A short trade could be made on a break of the $12 support level. A breakthrough $13 would break the down trending resistance and would set up a potential long trade.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
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