The number 7 is widely associated with good luck. It might not seem that way for Isle Of Capri (ISLE) shareholders, however. Three times in the last year, shares of ISLE have rallied to and, briefly, through $7 only to get knocked back down. Certainly, if you were a buyer at that level, you would not consider the purchase to have been fortuitous.
The first two failed rallies were characterized by long upper shadows on the weekly candlestick chart below. In this circumstance, those shadows are a symptom of a tired rally. The bulls had run out of energy, or there were many sellers eager to get a price above $7 for their shares, or both. The latest rally failed to even produce those short-lived upward spikes. The shares briefly edged above $7 and immediately turned back. It is interesting to note also that back in 2011 a bit of an air pocked developed between $7.00 and $7.75. It is not a surprise that the market would run into trouble in that region.
So far, prices have not completely collapsed, as they did after the first two pushes to $7 (though there is still plenty of time for that). And, generally, we are seeing high trading volume where we would want to see it. Maybe the third time’s a charm? If you don’t want to gamble, then wait for two consecutive weekly closes above $7 before taking a long position here.