Watching AFAM and MYGN
12/05/2008 11:12 am EST
In this column, here’s an actual trade setup that we are stalking for entry at some point during the week. Note this does not take into account overall broad market conditions, which can easily affect the trade over the next several days.
On December 3, we bought two new stock positions. Both entries were based on a break above the hourly downtrend lines, with AFAM being the more complete setup, as it is trading above the 50-day MA (below are the two hourly charts with our entry points). The charts below explain the rationale behind the entries, both of which are still in play.
Overall, we are seeing better price action, but it's still too early to make any predictions. MYGN broke out to new highs on very heavy volume, which is an encouraging sign, but we'll need to see more breakouts like this over the next few weeks if we are to get excited about a sustainable rally.
By Deron Wagner of Morpheus Trading Group