Forget Jonathan Bush, Buy Athenahealth
- Posted by Greg Harmon
- on May 28th, 2014
Jonathan Bush may be crazy, but the stock of his company Athenahealth, $ATHN, is ready to run. The stock was beat up over the 3 months but technically (and with hindsight) it performed as a technician might look for. The weekly chart below is easy to follow. The price moved outside of the upper Bollinger band on higher volume (red arrow) and followed the next week with a candle with a long upper shadow. Another long upper shadow confirmed a reversal lower that lasted until the beginning of May. At the same time the RSI had become extreme and started to turn lower. The MACD topped on the same week and gave a sell signal (the cross) 4 weeks later. In hindsight
these signs all pointed to a move lower. What we can learn from it though is more interesting, and applicable now. The price action is playing out the same scenario in reverse at the bottom. The long tail (green arrow) on the May 5th weekly candle that touched through the 100 day SMA signaled the bottom on high volume. The next candle an inverted Hammer is also a possible reversal signal and they were confirmed last week with a move higher. The RSI is moving back up and the MACD is bottoming. You can wait for the MACD to cross up to confirm or look at sizing a good reward to risk trade against the 100 day SMA now.
Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades from Amazon.
Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through May 2014 Expiry and sign up here
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- 5 Trade Ideas for Tuesday: Abbott Labs, Applied Materials, Citrix, Graco and Lowe’s
- Top Trade Ideas for the Week of January 17, 2017: The Rest Premium
- Top Trade Ideas for the Week of January 17, 2017: The Best
- SPY Trends and Influencers January 14, 2017
- Macro Week in Review/Preview January 13, 2017
- How This Week’s Top 10 Performed, January 13, 2017
- Premium Earnings 1-13-17: Morgan Stanley
- Confirming the Double Bottom in Emerging Markets
- Premium Earnings 1-12-17: Blackrock and JP Morgan
- Nasdaq Soars as Dow and S&P Bore
Dragonfly Capital Updates