The ESRX chart is looking like a classic case of a trend reversal and potential shorting opportunity. After being in an uptrend for many years, it formed a bearish Head + Shoulders reversal pattern over the past 3 years.
It finally came to test the neckline (at 65) of the right shoulder, and fell thru that key support and dropped to 63, and is now coming back up to re-test that 65 level (which is now resistance). So it's the moment of truth - will it get back above 65, or on the other hand will the re-test of 65 fail? The next several days/week will be the crucial period to watch.
ESRX has been a high quality company for many years, not the kind of stock you'd ideally want to short. But they are reportedly in danger of losing their biggest customer, and are facing fundamental changes in the healthcare pricing system for drugs,
and might conceivably even be accused of running afoul of regulatory pricing rules (?), in which case the class action lawsuits firms would pile on mercilessly as they always do when companies hit problems.
Anyway, if the stock fails in its re-test of 65 and starts to fall off again, that would be the signal to short. It's possible though that it could have multiple attempts to re-gain 65 over a period of weeks, so caution is warranted. When investors have decided that the direction is down there should be a burst of volume as longs bail and shorts pile in. I figure it would then test 60 and then likely trade in the 50s. So not a huge opportunity for profit on the short side, but a good classic case of trend reversal to watch for its educational (and entertainment) value.
So far the volume on today's re-test of 65 has been weak.
