Stock Chart Analysis MCO

Posted by downtowntrader | 10/15/2009 10:50:00 PM View Comments

Stock Chart Analysis MCO
Moody's Corporation (Public, NYSE:MCO)

There is an interesting pattern developing in MCO and the resolution could lead to a big move. MCO broke down from a consolidation in September on a large increase in volume. This move came after several months of drifting lower, as it corrected a sharp move higher from March through May. On a weekly chart, MCO still looks like death, so the recent breakdown looked like the beginning of an eventual break back to new lows. Over the past couple of weeks, MCO has been rebounding back into the prior area that was holding as support which often provides a great shorting opportunity.

However, MCO has yet to really show weakness on this bounce, and is now peeking its head back into the base. This market has had a plethora of failed bearish breakdowns, and its interesting to see if MCO will now join the list. Who knows if this move is related to options expiration tomorrow or not, but MCO would surely catch a lot of bears off guard if it could rally a few more days. My inclination would be to short this on any weakness at these levels, but I am open to anything occurring at this point. As traders, we should always prepare for multiple scenarios so that we are not caught scrambling by the unexpected.

Good Trading,


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