Saturday, April 24, 2010

Trade idea for Monday 26th, April 2010

You can see on the daily chart that after breaking support on earnings news around $19.50 from a 2 month base pattern and slicing through the 50 day MA on heavy volume two weeks ago, MEND has rallied on low volume back to support now resistance once before dropping to minor support at $18.25 and is now rallying back to $19.50 resistance level on low volume a second time.

I believe this bounce will fail just as the last one and with the markets this overbought and a pull back looming; I think this is a high probability opportunity to short MEND for a 2 - 3 day swing trade. The 15 min chart clearly shows the channel MEND has been trading in between $19.50 and $18.25. The white lines mark the suggested entry level ($19.25), stop loss level ($19.50) and target ($18.25).
This trade has potential to develop into an even longer term trade if MEND cracks support on heavy volume mean while the overall markets experience heavy distribution.

No comments:

Post a Comment