However, it fails on further scrutiny. Although the bear signal was confirmed, it runs contrary to the main trend, an upward movement beginning in July 2010, with the most recent leg having begun in November 2012.
The historical odds show the strength of the upward momentum. There have been no prior breakouts to the downside -- bear signals -- during the present leg up from last year. The full uptrend, from 2010, has completed eight bear signals, only two of which produced a profit.
It would take a drop from the present level -- $31.37 -- below the prior higher low of $20.04 to break the uptrend, although a clear low-lower high-lower low zig-zag would give the downward move more credence.
But the chart isn't there yet, so for those reasons, I won't be pursuing further analysis of MDCO.
References
My trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.
Disclaimer
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
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