Medidata Solutions (MDSO) posted better than expected revenues and EPS in late April and the stock exploded higher as a result. Since that time, MDSO hasn't been able to add to those gains, instead consolidating in rectangular fashion with its RSI dropping to 40. As you look at the chart, you can see that each time MDSO's RSI has fallen back to 40 during its current uptrend, it's been a nice time to enter on the long side. Will this time be different? This most recent move lower has failed to hold the rising 50 day SMA for the first time since earnings were reported, but recent price support closer to 53 continues to hold. Then there's trendline support, which intersects the 53-54 area as well. A close below 53 would likely lead to a test of very significant price support at 51, the level of price resistance prior to the April earnings breakout. Volume trends are strong, so I'm expecting that MDSO will bounce sooner rather than later. We'll see. Have a look at the chart:
Happy trading and enjoy the holiday weekend!
Tom
