Don't Ignore This Chart!

Did Mylan's Shooting Star Candle Mark A Near-Term Top?

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We'll soon find out.  But, as a short-term trader, I'd have sold Mylan (MYL) into the close today.  A close above 40.09 on heavy volume would confirm a breakout.  Today, MYL hit 41.59 intraday, but fell all the way back to close at 40.01 as it failed to hold its breakout into the close.  Given that nearly 20 million shares changed hands - one of the heaviest volume days of 2017 - that false breakout, reversal and long tail to the upside is quite ominous.  The rising 20 day EMA looks like a short-term target to the downside:

It certainly had the prerequisite volume that I'd look for to confirm a breakout.  One bright spot is that the MACD has now been above its centerline for nearly three months and that's indicative of bullish price momentum.    A confirmed heavy volume close above 40.09 is what's needed to really get MYL rolling.

Happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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