Saturday, October 31, 2009

New Trade Alerts: Expedia (EXPE), Teleflex (TFX)

Expedia Inc. (EXPE)

If it rings a bell, it's because I highlighted the looming breakdown from Expedia in some comments from yesterday. At the time, the chart had flashed a few key hints of a major reversal; today's move to lower lows seals the deal as far as I'm concerned.

As for a target level, I find it very interesting that the first major Fibonacci retracement line at $19.41 is perfectly splitting the gap from July 30th. A pullback to that mark could effectively kill two birds with one stone for EXPE. So, let's start there. It's not a huge move, but it's not bad either.... and it will build a profit cushion if we decide to hang onto the trade and fish for more gains when/if $19.41 is reached.

Side note about Expedia - the company actually reported pretty strong results yesterday, yet the stock started to implode a few days prior to the announcement. I think this is a pretty clear case/example of 'buy the rumor, sell the news'. But, given just how big the gain has been since early this year, there could be a lot more profit-takers waiting in the wings.

Teleflex Inc. (TFX)

The nearby chart of Teleflex shares - despite showing the complete transition from a bearish phase to a bullish phase - still doesn't quite do the stock justice. I didn't have room to show you how the resistance line extends all the way back to the middle of 2007.

For those of you who read my comments fairly regularly, you'll know I'm a fan of trading high-volume breakouts and breakdowns that occur simultaneously with strong moves outside of wedges or triangles. That's what we're basically seeing right now with Teleflex, but I didn't find this chart the way I usually find those trade setups.

No, TFX was put on my radar because one of my system-based signals (which scans for accelerating volume and momentum trends) found it. As evidence of that detailed scan, note the accumulation-distribution line has been reaching new multi-year highs for a while, even though the stock hasn't - a great pattern, but not one many people look for. That's the power of customizable scanning.... it finds ideas nobody else is really thinking about. And believe me, Teleflex is on very few radars.

As for a target on Teleflex Inc. shares, let's just start with the simple one of last year's peak around $67.00.

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