A Big News Crash in Uptrending Equifax EFX
Wed, Sep 13, 9:31 PM ET, by Corey Rosenbloom
You’ve probably heard about the large-scale data breach exposing customer data at Equifax (EFX).
We’re not here to talk about that, but instead note the affect the news had on this strongly uptrending stock.
Here’s the run-up and the collapse on the chart:
We like to identify “Strong Stocks Getting Stronger” and buy pullbacks in these bullish candidates.
Equifax (EFX) shares were listed as a strongly uptrending stock in many scans and that was correct.
We see numerous small and larger tradable retracements (pullbacks) from before 2013 as shares traveled a long-term bullish uptrend from the 2009 low near $20.00 per share.
In fact, to see a stellar uptrend, view EFX on a Monthly Chart.
Nevertheless, headline news and the ramifications of the near-term future for the company sent investors fleeing the stock.
The result was a price collapse that took price 30% lower from the $150 level to the current $100 per share level.
It’s interesting that this news-driven plunge took place on a negative divergence at the target high.
Nevertheless, here we have a great example of how news can suddenly and violently interrupt uptrends in place, and how quickly we must react to sudden changes on the price chart.
Continue studying this stock for additional insights.
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Corey Rosenbloom, CMT
Afraid to Trade.com
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Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”
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