Chinese online media and gaming company Sohu.com (SOHU) may be a half a world apart from Groupon, but its price action isn't far off at all. Like GRPN, Sohu triggered a bearish descending triangle pattern earlier this summer. That's continuing to rule price action as we approach August.
The key difference with Sohu is that the triangle pattern in this stock was longer-term -- it had been forming since all the way back in October. And because longer-term patterns have longer-term implications, Sohu's sell signal remains flashing right now. Former support at $46 is now a resistance level for Sohu (a fact that can be seen back in May and June), and that means that even if shares did bottom here, they've still got some major selling pressure to overcome before they can regain the levels shares traded at back in 2011.
In other words, it still makes sense to sell down here.>>5 Oversold Stocks Ready for a Bounce Higher Don't think that oversold RSI is a reason to buy here, either. Statistically speaking, oversold RSI is more likely to become more oversold in the short-term. And with that momentum gauge still trending lower, there's no reason to expect anything more than a minor relief bounce this week.
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