In the post dated on 11 May, the weekly chart of Credit Acceptance Corp showed the company share price has been trading side way since October 2015.
Daily chart of Credit Acceptance Corp.
The share price gapped up on 2 May with relatively very high volume. Thereafter, trending side way below $219.33 (2 May closing price) supported by relatively very low volume.
Weekly Chart.
From weekly chart, S-Trader Trend Tracker resistance level at $223.06 a great barrier for the share price to move higher.
Since Dec 2016, the share price attempted several to break above the resistance but unsuccessful.
Week ending 5 May, the share price tried to rally with relatively high volume which, comparatively higher than those price action between week ending 9 Dec 2016 and 6 Jan 2017. Despite that, it still failed.
Is the smart money losing their faith on this company ?
Only a positive catalyst able to push thru' the resistance level.
Weekly S-Trader Trend Tracker levels.
Resistance = $223.06
Support = $186.90
Source :
1) Metastock
When Don Foss was inducted into his industry’s hall of fame in 2015, he
was adamant he wasn’t retiring. Addressing a Las Vegas audience of
easy-credit used-car dealers who lauded him for creating the subprime
auto-loan business, he said, “I’m just getting started.”
Last summer, however, he sold Carite Corp., a
chain of used-car dealerships that he founded in 2011. In January he
stepped down as chairman of Credit Acceptance Corp.,
the company he started in 1972 that pioneered extending auto loans to
customers with rock-bottom credit scores or none at all. A month after
he left, he sold a big chunk of his Credit Acceptance shares for $128
million.
The company didn’t say why Foss sold his shares and declined to comment.
Foss didn’t respond to requests for comment. But his exit coincides
with tough times for subprime auto lenders in general and Credit
Acceptance in particular. Short sellers — investors who bet that a
security will fall in price — have become intrigued by the idea that a
bubble is forming in subprime auto lending. Bearish bets on Credit
Acceptance have risen to about 48 percent of the shares tradeable by
public investors, making it the third-most-shorted stock on the Russell
1000 Index of large and midsize companies.
For more news, click below link :
As Inventor of Subprime Car Loans Exits, Critics Smell a Lemon
Prior to these news, on 27 April, Bloomberg reported Wells Fargo & Co. and JPMorgan Chase & Co. have grown more reluctant to make new subprime loans using money from
their own balance sheets. Wells Fargo tightened its underwriting
standards and slashed the volume of all loans it made to car buyers in
the first quarter by 29% after greater numbers of borrowers fell behind on payments. JPMorgan’s consumer and community banking head Gordon Smith earlier this year said the bank had cut its new lending for subprime auto loans "dramatically".
More news, Wells Fargo, JPMorgan Wary of Auto Loans, Pack Them in Bonds
Weekly chart of Credit Acceptance Corp.
The share price has been trading sideway since Oct 2015.
We shall look more on the price chart in the upcoming post.
Source :
1) www.bloomberg.com
