Quadruple Confluence on Manugistics

The hallmark of many a professional trading strategy
is to identify the point at which several technical factors line up in agreement.
Monday’s action, while largely negative, has brought about a few interesting
setups.

Here’s one in Manugistics
(
MANU |
Quote |
Chart |
News |
PowerRating)
.

There are four technical factors that, in combination, could
provide hefty support. MANU is pulling back to:

  • its 20-day moving average

  • a five-week trendline

  • the lows of its seven-day range

  • its 50% retracement level (off its big range day on 9/22)

It is best not to have preconceived ideas of what may happen
here. When I say “hefty support” think as much about what will happen if it is broken as what will happen if it is not. Our job as traders is not to predict, but to watch and react…and react
fast. Think of an inflection point such as this as an area that will tend to
repel price action in one direction or another. We could get a bounce. Or we
could see MANU breakdown, which would potentially trigger an accelerated decline
in MANU. If this occurs, you’ll want to look for a surge in volume that would
confirm downside momentum.

Till Tuesday,

Eddie