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ADXR


Stryker Corp. Shows Long-Term Uptrend

04/23/04 09:26:27 AM
by Ashwani Gujral

In a sideways market scenario, there are always stock-specific stories that emerge showing strong uptrends. They offer the lowest risk buying opportunities when the market has no underlying trend.



Security:   SYK
Position:   N/A

There are times when the stock market becomes a market of stocks. Although the overall market is moving sideways, individual stories continue to offer strong uptrends to traders. These stocks tend to move up when the market moves up and move sideways when the market moves down during the sideways market move. The key is to identify those stocks in strong weekly uptrends, and enter when they emerge out of intermediate corrections.

Figure 1: Weekly chart of Stryker Corp.
Graphic provided by: eSignal.
 
On the weekly chart, Stryker Corporation shows a consistent uptrend and continues to stay above its 20-week MA. The corrections in price below the moving average and then the move above it offer long-term entries into the uptrend. The ADX continues to rise and indicates a continued strong uptrend. Remember, a declining ADX indicates consolidation while a rising one above 20 indicates a strong trend -- up or down. Traders should trade these corrections to the uptrend on the daily time frame where they appear as sideways consolidations.


Figure 2: Daily chart of Stryker Corp.

On the daily chart, Stryker Corp. shows an uptrend with intermittent sideways movement. These sideways moves occur after an interval of upward movement and are great buying oppurtunities. Since the overall market is not strong at the moment, breakout trades should be avoided. Instead, traders should wait for the breakout to have a pullback and test the previous support. On the daily chart I have marked a broadening formation, which acts as continuation pattern as the price breaks out of the upper boundary. In a bull market, such breakouts can be bought. In a sideways market, where other traders might be too eager to book profits, waiting for a reaction is better. Therefore, I recommend that traders buy on any pullbacks to the rising resistance line, to about the $95 level. The ADX on the daily chart confirms the weekly strength. Also the daily MACD oscillator has risen after a correction, indicating a continuation of the upmove. A target of $102 is calculated, assuming the broadening formation occurred in the middle of an upmove.



Ashwani Gujral

He is founder of AGIP Securities Pvt. Ltd. which offers money management services, live chat rooms (during market hours) and independent technical analysis consultancy. The company has a big media presence from the likes of CNBC, NDTV Profit, and ZEE Business.

Title: Chief mkt strategist
Company: AGIP Securities
India
Phone # for sales: 9871066337
Website: www.ashwanigujral.com
E-mail address: contact@ashwanigujral.com

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