MLR - Price/volume is key

Published : July 18 2012 at 18:18 ET

We sent out a report on a stock earlier today as it had a buyable gap up because a drug in its pipeline received FDA approval before the market open. Type in keyword 'gap' into the keyword search bar here if you are not fully familiar with the buyable gap up strategy.

That said, this brings to light what is important when it comes to actionable stocks. When gearing up to buy a stock, once the fundamental story and fundamental variables show leading characteristics, then the technical action must be sound. It is not the news item itself that is important but the price/volume action that results from the news item.

In a similar vein, we reported on MLNX as being actionable on the long side a number of times as it had a number of pocket pivots. For those who used our 7-week rule (see FAQs for further information), they are still sitting in the position since MLNX violated its 10-day moving average on June 22, 2012, thus one would use a violation of the 50-day moving average as their sell stop. A violation occurs when the stock closes below the low of its moving average then moves below the low of that close. Thus, price/volume action using the 7-week rule, once again, has kept one in position. Note, all stocks under consideration must display leading fundamental and technical characteristics before we will consider them actionable.

This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.