Tuesday, November 13, 2007

Swing Trade : Mastercard Incorporated (NYSE:MA)


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I kept talking and talking about Mastercard Incorporated (NYSE:MA), and today, I finally acted.
Yes, I mentioned that I would be waiting until it dropped below $175 before buying. But in all honesty, I just didn't want to wait and wait until that happened.

There are 3 possible scenarios for MA: it goes up, it goes sideways, it goes down. My worst case is the possible scenario where it goes down, so my analysis will be for the scenario where it goes down.

Based on the above chart, I can see that the bulls took control of the 182 and 184 level. Today, there was definite resistance at the 186 level, but the bulls managed to take control of that level too. But the next couple days will tell whether 186 holds up as support.
Any sustained break below 188 will break today's uptrend. However, a break below 188 does not necessarily mean that it will breakdown, so I am not worried about a break below 188. A break below 186 would likely trigger some stops set by daytraders. But I am not holding this for a daytrade.
MA also put in an insdie day today, so the break of the HoD (high of the day), or LoD will signal a possible continuation move in the direction of the break. So, that means my first warning sign to get out will be a failure to break above 192.2 in the next 2 or 3 days. The second warning sign to get out will be if price stays below VWAP. The last warning to get out would be a break below the gap support @180. Breaking below 180 means that the two support levels above (182 and 184) have failed, so there is no longer any reason to be in the trade.

In short, a break below 180 for MA will be my "uncle" point.

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