Don't Ignore This Chart

Mylan Continues its Move with Expanding Volume

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Mylan (MYL) was hit hard in early August with a plunge to 30, but firmed and recovered with a gap and surge to the upper 30s. The stock consolidated after this gap-surge and recently broke out with above average volume. Notice that the gap-zone held in the mid 30s as the stock consolidated in the 35-39 area. A consolidation after a sharp advance represents a rest that is needed to digest gains and alleviate overbought conditions. The consolidation did its job for eight weeks and ended with Friday's breakout. In addition to the breakout, note that upside volume outpaced downside volume over the last two weeks. This means buying pressure is increasing and validates the breakout. I would consider this breakout valid as long as 36 holds and re-evaluate on a close below this level. 

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--Arthur Hill CMT

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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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