Shares of Freds Inc (NASDAQ:FRED) continue to get ravaged as the company struggles to survive. Now at $1.85, the stock is basically priced for bankruptcy. However, that means there may be an upside surprise lurking. In the very least, the stock chart is signaling a technical bounce on the horizon off the $1.85 level. If you look at the chart, the stock has been in a steep downtrend for well over a year.
However, every flush to a major trend-line (shown below in the chart) has yielded a big bounce. As of today, that same trend-line is being hit again. This ups the odds significantly of a strong bounce higher. I have a $2.40 target penciled in from this $1.85 level. That would be a sweet return in just days/weeks of 30%.