NFTRH+; A Medical Device Co. Short Setup

I initiated shorts on a couple of device companies yesterday, WAT & VAR. Of the two, WAT has the better (or should I say worse?) looking chart. Ref. a post from Tuesday noting the general over-valuation (in my opinion, at least) of this sector, which is a fundamentally stable one through economic cycles.

As to the chart, WAT gapped down through the SMA 50 and SMA 200 and is now turning the SMA 50 down. It can bounce at any time to test the SMA 200 at around 195 and an upside gap fill seems like a remote possibility, but the gap exists so we should note it. That did appear to be a breakaway gap (on volume) that changed the trend from up to down, so it need not fill any time soon.

The best shorting opp. would be on a bounce to test resistance that relieves the mild oversold reading on RSI. The downside target, if this breakdown holds, is around 168.


The weekly chart gives more perspective on the downside potential. The pattern target above measures to the lower channel line below, but there is really no major lateral support until 160.


The key here is to hold below the SMA 200 on the daily chart (and noted resistance on the weekly). A rise above that could bring a test of the daily SMA 50, which would still be within a bearish context but could make the trade uncomfortable even in making a lower high. So if interested, manage risk as suited to your orientation.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason), which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.