Stock Chart QSII

Posted by downtowntrader | 8/05/2009 07:00:00 PM View Comments

Stock Chart Analysis QSII
Quality Systems, Inc. (Public, NASDAQ:QSII)

I don't post frequently on the longer term setups I am watching, as my main focus is on swing trading for a holding period of a few days. However, I always keep track of weekly charts to let me know from which side the wind is blowing. If I'm going to lean one way or the other, I prefer the longer term trade in my favor.

When looking at weekly chart, I will sometimes find a true multi year breakout, that merits a closer look. When a stock clears a multi-year base, it typically means most bagholders are in the money and comfortable holding. With lack of overhead supply, and momentum money flowing in, the possibility for a good trend is strong.

Quality Systems, Inc. (Nasdaq:QSII) is an example of the type of chart I like for this type of trade. If you look at the weekly chart below, QSII recently cleared a 4 year base. If you dig a little deeper, you can see that QSII never even gave up the base despite the horrific decline last year. It had attempted to breakout last July, before failing and trading in a very erratic and volatile range once the markets fell apart. As soon as the markets set their recent intermediate low, QSII embarked on a clean run to all time highs. While QSII still looks relatively healthy, it is a little extended on this time frame, and with the general markets really overbought it's probably a good idea to wait for it to pullback a little. I am eyeing the $45 level as a possible area, but I will watch the price action to see what develops.

Good Trading,


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