One Way To Fade The Trend

There are lots of wonderful
sayings on Wall Street,
like: “A trend in
motion stays in motion” — but speaking personally, I tend
to like Sir Isaac Newton’s, “What goes up, must come down” a whole lot more. This
isn’t to say that I look to trade contra to any established trends — but if I
feel there is a nice blend of technical and fundamental evidence that weighs in
favor of some profit-taking activity, then I’ll gladly look for some
well-defined entries that attempt to get in before it becomes painfully obvious
to the rest of the crowd.

Lexmark
(
LXK |
Quote |
Chart |
News |
PowerRating)
was pointed out to our
members’ chat within the first 10 minutes of trade as a potential reversal as it
traded against some potential Fibonacci resistance after thrusting higher out
the opening gate. The first two bars were looking very much like the start of a
possible
Trap Door Opening Reversal. One other reason that Lexmark was on my list
of potential topping patterns was because it had shown extraordinary strength
relative to its technology peers such as HPQ, DELL, and INTC, to name a few.

As you can see, the pattern never emerged and the
only real hurt might have been psychological as the potential triggers were
never quite established….thankfully so. Later on in the session though, with
fresh highs in place, an opportunity did finally unveil itself for reversal
players out there.

11:58:35


Intraday Setup Alert

Lexmark (LXK)
has formed a fresh 52-week high in today’s trade–
but, with the issue up
over 3 points at 90.52, there is evidence of an impending reversal. Session
highs have pierced a 162% Fibonacci pattern extension, and the 5-minute intraday
chart is developing a

Slim Jim
after thrusting higher in the opening thirty minutes of trade.
Potential short entries below pattern and MA support on the intraday chart are
set below 90.50.

Lexmark might be good at printing copies for many
businesses and individuals out there, but it’s when everything comes together to
make perfect “cents,” that Lexmark is just as good for printing the color of
money.

Chris Tyler