QCOR Trade Idea

QCOR looks like a nice short set up, it has broken down badly from a long term up trend and is showing many changes isn character. The trade is probably very close (letting it come to you) to a high probability/low risk trade and very close to a stage 4 trade. In a long trade stage 2 mark up is where the trend and easy money are, in a short trade stage 4 is where the trend and easy money can be found, the difference being that stocks fall a lot faster and harder then they rise. QCOR has had a great run of over 9000% in the last 5+ years, but something is changing the tone.

 Volatility spikes are often a warning that a top is forming, my custom close within the range indicator has also been quite negative with the average being between 25-50% and not much above that. Think of this as a long term candlestick chart and the trend is a candlestick with a long upper wick and a close in the lower end of the range, like a shooting star.

 RSI has been negative and it both broke and filled the gap on the same day on heavy volume.

 Here's the recent x-over signal

 QCOR is now sitting on some long term support (150-day m.a.), so it's very close to a major break, but also in the area where we can probably short in to some short term price strength on a bounce off support.

 There are many smaller divergences on the chart, but the biggest ones are what are important, the positive divergence in 2003-2007, the confirmation since the stage 2 mark up began and recently distribution and quite strong on a daily chart.

 The hourly chart shows the same, from confirmation to distribution.

 As does the 30 min chart

 And the 15 min

 Near term we have a small positive divergence, this is the bounce we want to look at shorting in to on some price strength to lower the risk of the trade for risk management purposes, which may also allow you a larger position.

The Trend Channel and the 22-day moving average would be my rough targets and considering where they will be, I'm thinking somewhere in the $36.50 area, although you may want to consider a phased entry in 1/3 or 1/4 size positions once you figure out your maximum position size and risk management.

I would expect to see a move to the long term trend line, in the $20 area. Email me if you have specific questions about the idea.