Sunday, June 10, 2012

Forest laboratories Inc.

Forest Labs (FRX) broke out of the consolidation nicely last week. I have a buy call for this ticker at this time with a stop below 33$, below which you go short on this name in case the breakout was false.

CMG has been trading in a descending channel for the last 2 months with the RSI forming a positive divergence with the price. RSI has been forming a higher low while the price was forming a lower low. I am looking for a channel breakout, not yet. There was a false breakout on thursday, so I would be looking for a close higher on the channel. Don't buy before the breakout, use a 7% stop.

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