David's Trade Journal

[david_3011]

Trade Journal: Caremark Rx, Inc. (CMX)

In the rising health care cost environment, pharmacy benefit management service is one of the health care sectors that should continue to perform well. And, CAREMARK RX seems to offer a very good entrance opportunity for those interested.

The Full Stochastic Oscillator is showing bullish signs of a possible breakout of the current consolidation phase - see annotations on the chart. The only concern is the lack of volume, but then the declining volume usually means the end is near for consolidation. And, judging from the way CMX bounced off the multi month support of $42 and touching its 20-day simple moving average line, the next move after the consolidation is most probable to go up.



And so, this is our trade:

Buy: Long position buy under $45
Holding Period: 3 to 6 months
Stop: $40 and trailing as the price moves up
Target: $55 - $60 or about 27% - 39% gains.

My Buy order was filled in two separate lots that averaged $43.1667, and so that's the actual cost of my long position in CMX.