Using the Weekly time-frame to assess the damage in Cognizant Technology

Yikes.

Let’s get right to the Weekly chart:

CTSH_weeklyThe Cons:

  • Lost the 50 SMA (68.49)
  • Lost the 200 SMA (62.34)
  • The pullback is on Rising volume
  • MACD rolled over
  • 2 weeks of Big selling
  • The Gap defined by the blue box has not filled yet

The Pros:

  • Crickets
  • Kidding, lol
  • Notice the Volume at Price bars. 5 massive bars in the price range of $60 to $75
  • Approaching the RSI O/S area of 30 where 2 prior tests were bought (last one however was a 13-week bottoming process)

My assessment is this: I think it finishes filling the gap below and that should coincide with the RSI bottoming at 30. It is then that one can consider building a new long position for a rebound play. The R/R for a new short position here has diminished but can be considered nonetheless.

The next Earnings release is May 8 BMO.

Here are how the May & June Option chains currently look:

CTSH_Options_chains

2 thoughts on “Using the Weekly time-frame to assess the damage in Cognizant Technology

  1. If you go out to July, someone ammassed a large positoin in the 70 Call strike last week paying upwards of 1.55, though had the feeling that price was not of the issue.

  2. Pingback: Best Of The StockTwits Blog Network 5-4-13 | The bclund BlogThe bclund Blog

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