 | Technical Trade Alert: ICU Medical (ICUI) | |
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On the surface, ICU Medical Inc. (NASDAQ: ICUI) may appear to be a perfectly fine company. And, we don't disagree - they're profitable, and shares aren't unreasonably priced.
| Company Name: | ICU Medical Inc. | | Rating: | Technical Trade Alert (Bearish) | | Stock Symbol : | ICUI | | Trade Initiated: | Jan. 23rd, 2009 | | Current Price: | $30.48 | | Avg. Volume (3 mo.): | 123,594 | | 52 Week Range: | $22.14 - $37.82 | | Market Cap: | $444.5 M | | |
However, we're not getting married to our bearish point of view. This is simply a suggested short-term technical trade - bearish - based primarily on a long-term chart pattern ... a pattern most investors may not have realized was in place.
The short-term chart (going back to the middle of last year) reveals something pretty amazing about ICU Medical ... a gain. The last few months aren't anything to write home about, but being just flat since September is still an accomplishment in itself, right?
That same chart, however, more subtly reveals that not only has that bullish momentum waned , but may also be turning bearish again.
After peaking at $35.11 in October, each subsequent peak has been marginally lower than the last. More recently, ICUI has also started to hit resistance at some key moving average lines. Though it's still been a much better performer than the overall market has been, that relative outperformance coupled with recent bouts near resistance levels may also be the inspiration for another round of selling from impatient investors. (The longer a stock remains stagnant, the less lenient its owners become.)
At the same time, the way the short-term chart appears to be rolling over now is augmented by a longer-term chart pattern not as readily apparent.
Going all the way back to the peak of $48.34 in October of 2006 we can see how ICU Medical shares have been plagued by a resistance line (red). This line was a trouble spot twice in the middle of 2007, and appears to be the same reason the last three peaks since October occurred where they did ( and is why each of those peaks was lower than the previous one ).
Though nobody has a crystal ball, we feel the odds are high ICUI will ultimately give us a repeat performance of its prior encounters with that resistance line.
We're not offering a specific target or stop, even though this is a technical trade alert. However, we can tell you we're eying prior low points - recent and distant - as potential rebound levels. We may look at those levels in detail when the time comes.
$30.49 (01/23/09)
