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SXCI found plenty of volume today above it's ten DMA.
and what does that tell you, Abe?
The pocket pivot level of volume tells me that there is a lot of interest in SXCI here. You have to pull a lot of analysis together to get the correct read on this volume that looks a lot like stalling.
Still my read is positive. Why?
1. There has been no retracement of the 13.5 million shares purchased on 4/18/2012, even during the multi week market correction that followed.
2. EPS & sales growth are strong.
3. Pharma sector is very strong
4. 50 DMA is very steep
5. 20 DMA is acclerating higher
6. More than 12 weeks have passed since the market started correcting
7. The market correction had three waves down.
8. 6/29 was the third follow through day since the market began correcting in April
9. 6/29 follow through day occurred higher in price than the the most recent follow through day
10.6/29 follow through day has extended its gains
10. Other sector leaders have extended their gains: PCYC; ALXN; SLXP
11. The SXCI 9 week base was 14% deep following an 80% two month run from 60 to 100.50 in March-April
12. Always keep the caveat in mind. The heaviest hourly volume today was red and closed at the low.
what about the breakout day and the 2nd break of the pivot. both negative major reversals? Something is holding this stock down.
I weigh that against how the market has treated that 13.5 million shares of buying; 80% prior run up in 8 weeks and a 14% deep base and the market turning higher in the 1st week after a follow through day. Hmmm let me think.
The intraday reversals (initial forays into NH ground but then reversing to close down) on above average volume on 6/19 and 7/02 suggest that certain market participants "pick off" overly eager IBD/Mkt Smith subscribers. I'm keeping SXCI on a watch list, but distrust its bad action of the past two weeks.
What would be considered the correct buy point for it now: $100.60 (original buy pt for the consolidation up until the past two weeks), $104.07 ($.10 above the 6/19 intraday high), $104.89 ($.10 above the 7/02 high), or something else?
The fundamental story to consider (all good analysis includes fundamentals) is the acquisition that closed Monday and the SNP 400 change. Also, acquisitions have an arbitrage component to consider in the volume. SXCI continues above the 10 dma. Yet, I agree, be careful about bearish reversals.
S&P Dow Jones Indices LLC announced Monday that Rosetta Resources Inc. will replace Catalyst Health Solutions Inc. in the S&P MidCap 400 index after the close of trading on July 5.
The move comes as a result of SXC Health Solutions Corp.'s acquisition of Catalyst Health Solutions, expected to be completed Monday night. Rosetta Resources, based in Houston, is an onshore oil and gas exploration and production company.
@mike88invest.. I must be one of those over eager subscribers. I got hit on the first breakout... considered the 2nd, but thankfully held back.. Ideally I'd like to see this break out strong and stay well above the pivot before diving in again. I don't mind missing the first 3-4% if it means the breakout will hold.
Those heavy volume reversals may end up being overwhelming selling, but there is some reason the stock did not delcine during the April/May correction. Addtiionally note how TCBI shook off two failed breakout attempts.
CAN SLIM rules let us buy on the breakout and within 5% of the 50 DMA. We are currently within 5% of the 50 DMA. Note how SXCI showed some heavy distribution and two tests of the 50 DMA in February 2012.
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