Don't Ignore This Chart!

Lexmark (LXK) Challenges Wedge Resistance On Increasing Volume

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Lexmark (LXK) announced after the closing bell on Tuesday that it was acquiring enterprise software company Kofax (KFX) for $1 billion, its largest acquisition in its history.  Traders were initially excited by the announcement, driving LXK's stock price higher by more than 11% and LXK cleared bullish wedge resistance intraday and intraweek.  Subsequent selling, however, is now reflecting hesitation at that key technical area.  Volume is massive today so the close this week will be important.  The February high just above 45.00 is another critical price level the bulls will be aiming for.  While the acquisition may prove to be a very good one, let's wait to see the technical merits of the deal - either resulting in a high volume wedge breakout or allowing the current excitement to wear off and potentially entering closer to wedge support near 37.50.  Here's the chart:

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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