I have blogged RAD several times in the past.  It is a crappy penny stock company that has been a good one to trade.

The other day, I came across some news on CVS, one of its competitors, and marveled at the difference between the two companies.

RAD wishes it was CVS.

Rite Aid, Corporation (RAD)

Rite Aid is one of the nation’s largest drugstore chains. On April 24, 2010, the company operated 4,773 stores compared to 4,846 stores in the like period a year ago.

Rite Aid, in its latest earning report for April, is still struggling with declining same-store sales.  Revenues and profits are declining.  RAD is still a $4 Billion company, but their momentum is all negative.

RAD is not a stock to put in your IRA, but its volatility has been a trader’s dream (as you can see from the accompanying chart).  It looks like RAD is bumping up against two support levels at $1.35 and $1.30.  The trend is clearly bearish and indicators are giving support to a bearish trend.

The wild card in all this is the persistent rumors of  a buyout.  It makes sense.  RAD’s retail network has value.  Anyone buying RAD will close lots of store (because frankly Rite Aids are not known for their style and location like CVS).

Trade cautiously.

CVS Caremark Corporation (CVS)

The company runs 7,063 drugstores around the country, about 400 hundred less than rival Walgreen Co.   CVS said sales at stores open at least a year rose 2.3 percent.

Lots of good news coming out of CVS and the overall trend has been very psoitive.  The stock just recently broke below the trend line.  Watch it to see if it can resume trend.

Nice company…very well run with a great track record through the recession.

Have a great trading day,

Jeffrey Dean

Editor