MCP Trade Set-up

MCP is a good candidate for a potential long trade that comes to you with lower risk, higher probabilities. For this trade set up to occur it needs to pullback a little, maybe the $12.50 area, if it does (and I'd set some price alerts) we'll confirm whether or not there's accumulation on the pullback, but I think chances are pretty good based on what's there now.

I'll show you the current signals, the potential entry area and stops.

 On a daily chart MCP went straight to stage 2 mark up in to stage 3 distribution/top followed by stage 4 decline and by the looks of volume (capitulation event) it appears to be in the midst of a stage 1 base. I would think that it will eventually form a larger base judging by previous cycles, but that doesn't mean it can't make for a nice swing + trade.

 Here's the first appearance of capitulation on the exhaustion gap on volume, an area of support is formed and there's a second gap on exceptional volume for the stock which provides an opportunity to pick up a lot of shares very cheap. If today's candle closes something like this star or some other bearish /reversal daily candle on higher volume than yesterday, the chances of a downside reversal (pullback) increase so keep an eye on this one near the close if you are interested.

 You can see distribution around  June/ early July and then confirmation of the downtrend. There's no positive divergences beyond the 30 min chart, but it's also not that big of a base, as mentioned it may very well carve out a larger base able to support a new uptrend.

 A more detailed chart shows a weaker relative positive divergence at the exhaustion gap and a stronger leading positive divergence at the next gap below support as well as a current relative negative divergence suggesting a pullback.

 Our X-Over Screen called out the short position without having to spend much time in a lateral trend as well as a newly formed long signal.

 On the 2 min chart the general theme is broad confirmation of the move up with several negative divergences leading to corrections and positive divergences leading to new moves higher with a current relative negative divergence (this is the weaker divergence and thus more suggestive of a correction/pullback than something more negative).

 The 3 day Trend Channel holds good size swing moves well, it would have taken you out at the red trendline and then a renewed move down on the X-over screen above. $10.60 is the current long stop for the Trend Channel.

 Typically the first pullback or two of a new X-over long signal are to the 10 day (yellow) m.a., as the trend develops they get deeper to the blue 22 day.

On a tighter Swing basis, the stop on the daily trend channel would be $11.50. With a pullback that stop would be higher as the Channel would continue to move up so likely there'd be low risk and high reward potential in this trade and it would have the benefit of coming to you at better prices/less risk.