NFTRH+; A Medical Device Company Bull Flag Setup

Another former customer of mine (as were the previously reviewed BSX & CAH), Haemonetics makes automated blood handling systems and related software, devices and equipment. I added it today.

The daily chart caught my eye for its earnings driven pop (as did CAH) above the moving averages. A big fat gap you say? Yes, but it need not fill in the near or intermediate-term because it can be considered a breakaway gap, coming on volume and ramming the trend back above the moving averages. Price has corrected since August and the 50 day average has sloped down (indicating an intermediate correction) since September. The recent spike broke that trend and now it appears to be in a bull flag.

Ideally, we’d want the flag to hold the up-sloped SMA 200 as it is today, but there’s a good chance it will at least test the SMA 50. Regardless, if interested it’s a buy setup at or just above 115 with a stop loss to suit risk tolerance on a failure of the SMA 50 (a couple closes below). Some people use much looser stops but I would probably be strict on this one because I am buying this richly valued (like most medical device companies) company for the setup only.

Just eyeballing the chart, I like that you can see a distinct interruption in the post August downtrend/consolidation, as if the SMA 50 were a broken trend line. I also like that the SMA 200 is firmly up and that is the major trend. Now comes the job of turning the SMA 50.

Separately, daily RSI and MACD look good after going positive.

hae

It’s not a bottom feed situation by any means. It’s a classic pullback (since August) within an uptrend on a long-term up trending stock. Note that it has not broken the consolidation trend line on the weekly chart. So that puts the emphasis on the daily bull flag above to prove to be just that and break it up and out.

hae

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the technical parameters are already noted. These updates 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) as I often do. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.