Prescription for a Fall
- Posted by Greg Harmon
- on October 22nd, 2012
Many are jittery about the broad market but individual stocks are sending some clear signals. Two in the healthcare space are writing a prescription for a move lower, Express Scripts, $ESRX and Allscripts, $MDRX.
Express Scripts, $ESRX
Express Scripts, $ESRX, has been consolidating after a long run higher but is showing symptoms of a pullback. The Moving Average Convergence Divergence indicator (MACD) has been running negative for almost 2 months, with the Relative Strength Index (RSI) trending lower as well. Now the price, the most important piece, is testing support for the third time and from a lower high. Look for a break of 62 to start the next leg lower with a gap to fill to 56.83.
Allscripts, $MDRX, has a similar story. The MACD has just crossed to negative and the RSI is pulling back from a technically overbought condition. The 200 day Simple Moving Average (SMA) has been driving price lower and has now filled the gap and continues. Look for a break of support from the previous flag at 12.80 to retrace to 11.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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