Today I’d like to share with everyone a stock from my “Equities In Trend” watchlist. I’ve had an eye on Conmed ($CNMD) for a little while now, waiting for a pullback to a lower risk, better priced entry, as I believe we have now. Let me break down this chart for you first on the daily chart, and then you can analyze the weekly on your own.

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    If we use the Exponential Moving Averages (8/21/50) here to tell us whether or not we are trending, prices are clearly bullish. We have previously “wicked” into the 50EMA four times, and succesfully held this level, each time providing an excellent entry opportunity by the close, let alone if held for a short duration. We have now touched the 50EMA with the body of the candlesticks, bounced up, and from there we launched a huge rally that took us through the resistance around 01/11/2014. From there, $CNMD has flagged into it’s previous resistance (now support), as well as into it’s 50EMA. We know that flags are typically continuation patterns and this one is bullish in nature. So, to sum it up:

  1. 50EMA Consistently Providing Support for Bull Trend (5 Times)
  2. Bull Flag
  3. Long Term Uptrend
    All that said, I am bullish with a price target on this trade of $50 minimum and my stop is set to a close below our support and 50EMA. That would negate our support and consistent support at the 50EMA and negate our idea/theory that gave us our reason for entry, therefore that is the point we would take this trade off the table. If executed properly, we have a 5:1 risk/reward ratio, which is within my trading guidelines. Best of luck to you all, and remember to do your own due diigence before taking any trade!