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Edwards Lifesciences

10/01/12 08:57:55 AM
by Koos van der Merwe

With the market anticipating the end of the Presidential election, we should start looking for stocks that we would like to own.

Security:   EW
Position:   Accumulate

Edwards Lifesciences (EW) is a worldwide leader in the science of heart valves and hemodynamic monitoring. With changes occurring in the American medical structure, where complicated and expensive medical procedures will gradually become more affordable to the underprivileged, a company in the health sphere becomes a more attractive investment. This share came to my attention when it gave me a buy signal as shown in Figure 1.

FIGURE 1: EW, DAILY. Daily chart showing buy signal given on the vote line.
Graphic provided by: OmniTrader.
Figure 1 is a chart of a program I use to identify a share I could consider buying. The vote line on the chart is a summation of the various strategies shown in green. It has given me a buy signal on its recent rise to $107.37. The candlestick formation shown does suggest a hangman used to signal a top in the price rise, but the fact that there is a slight upper shadow above the main body does suggest that this could be a false signal.

The three indicators shown, the relative strength index (RSI) 4, the RSI 14, and the ergodic oscillator are all suggesting a buy signal, confirming the signal given by the vote. Note too the cup formation that appears to have formed, suggesting that should the price break above the 109.78 level, an even stronger buy signal will be confirmed.

FIGURE 2: EW, DAILY. Buy signal given by a break above the JM internal band.
Graphic provided by: AdvancedGET.
Figure 2 is a chart showing the JM internal band line. Note that the share price gave a JM buy signal on August 24 and again on September 26. The indicator and a moving average convergence/divergence (MACD) is suggesting a new buy signal.

I would be a buyer of EW, most probably nibbling at the price on any and every correction for a long-term hold.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address:

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