Friday, November 16, 2007

Matercard (MA) An excellent technical setup

The smart thing to do right now is to remain in cash. With that said, I have been watching MA ever since the huge breakout last month. What I found so interesting about the earnings inspired explosion was that Q3 07 was supposed to show decelerating earnings growth. Instead, growth has remained strong, catching a lot of people off guard.

The chart is showing a classic sign of a market leader. It not only had a huge breakout in a weak market, but has slowly retraced on ever decreasing volume. We are now approaching the magical point where the price of MA is only 8% above the proper buy point. MA is also approaching the 50 day moving average, an excellent add-on point for those who bought the breakout. For those who didn't, now is time to buy.

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