SanDisk Corporation (SNDK) had a negative divergence present, on the weekly chart, between mid June to mid January. The divergence was identified as the price made higher highs, while the Moving Average Convergence Divergence (MACD) indicator put in lower highs.
Recently, a bearish rounding top pattern is forming on the daily chart. Momentum picked up to the downside, last Friday, accompanied by heavy volume. In addition, an important sell signal was triggered when the price broke below the 50 day simple moving average. A short opportunity, therefore, presents itself by shorting the bounce, versus the 50 day moving average. This is a short term trade idea for swing and active traders, with a shorter time frame.
Target: $41, which is back to where the pattern began. The $41 level is also the high of an unfilled breakaway gap from November 22, Protective Stops: trigger on a close above the minor down trend line.
Photo: Zev Spiro
If you are interested in receiving Zev’s free market letter, email [email protected] subject “Insider”
Disclaimer: The information contained herein is not guaranteed. This is not a solicitation of any order to buy or sell. This material is based upon information that I consider to be reliable, but I do not guarantee its completeness or accuracy. Assumptions, opinions and recommendations contained herein are subject to change without notice, and I am not obligated to update the information contained herein. I may have a position in the security or securities mentioned. This communication, including any attachments, is for the exclusive use of the intended recipient(s) and/or the intended recipient’s designees. Any use, retention or dissemination by a person other than the intended recipient is strictly prohibited. If you are not the intended recipient or designee, please notify the sender immediately by return e-mail and delete/destroy all copies of this communication.