Here is the long and the short of Edwards Life Sciences (EW) (September 29, 2015)
I want to look at Edwards Life Sciences ( NYSE:EW ). Here’s why, it’s kind of an interesting chart. Depending whether you’re a bull or a bear by nature, there’s something for you here for you. (I am neither so lets just go through it) First of all, sideways consolidation; look at the uptrend here, look at the slope of the 50-day moving average and then suddenly it just kind of flattened out. So for quite a while it’s been consolidating, and that means that the stock could ultimately go either way. If it falls lower, and by the way, lower highs, this was a big breech of the low, of the 200-day moving average, this one, and then he didn’t get much of a bounce. So if it starts falling lower this stock could easily fall to 110.00, pretty easily. (On the other hand, which is why I said easily.)
On the other hand if the stock starts moving up, say above 145.00, now you’ve still got a channel. You’ve still got this sideways channel, and then you just need to see whether the stock’s ultimately going to push higher here. That’s really the analysis for both sides. As you look at this here, for me it kind of looks “toppy” because this is a high, this is a lower high, this is a lower high still, yet another lower high. It’s back below the 200-day moving average and not getting much of a bounce. That’s just kind of my sense of things. But if the stock starts trading above the mid 140’s or so then I think that’s really not the case, may just start to move up. As you know biotech healthcare, the bloom has come off that rose big time. So this could kind of be one of the last ones to be standing before it ultimately falls.
So here’s the moral of this story: I would wait to buy this stock until it starts moving up above 145.00. If you happen to be long this stock keep a tight stop here, this should hold. If the stock’s really truly in consolidation and possibly going to move higher, this level should hold. It should hold above the low of 133.14, today, the low of 133.32. It needs to hold above 133.00. If it doesn’t then I would say this now has meaning to the downside. So that’s the deal. You’ve got to look at two sides of an analysis. If this then that. But if the other thing, then that other thing. So, looking a little weak, I don’t want to buy yet. I need to see a lot more signs of strength. And if this level, from yesterday and today, does not hold up, you want be either short this stock, or you want to at least be out of this stock.
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