What's Going on With Masimo?
The stock is up, the stock is down. Here's what traders should do.
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Masimo Corp MASI is a medical technology company that "develops and produces monitoring technologies, including innovative measurements, sensors, and patient monitors". The company's stock surged higher Monday on a report of an activist campaign and disclosure of a spinoff plan for its consumer business.
Let's check out the charts and indicators.
In this daily bar chart of MASI, below, I can see that prices have surged sharply higher Monday but have retreated to its intraday low. Prices still trade above the rising 50-day moving average line and above the bottoming 200-day moving average line.
The On-Balance-Volume (OBV) line shows strength from a low in October. The Moving Average Convergence Divergence (MACD) oscillator has been holding above the zero line.
In this weekly Japanese candlestick chart of MASI, below, I can see a longer-term decline for prices over the past three years. The slope of the 40-week moving average line is negative.
The OBV line has been following prices lower the past three years. The MACD oscillator is back above the zero line but narrowing towards a possible take profit sell signal.
In this daily Point and Figure chart of MASI, below, I can see an upside price target in the $160 area.
In this weekly Point and Figure chart of MASI, below, I can see that the software is projecting a price target in the $215 area.
Bottom line strategy: When I see a stock surge higher but then give up most of its intraday gains I wonder what is going on. If the upside price surge was not accompanied by a volume surge I wonder even more. Traders should avoid the long side of MASI as its price gains could evaporate in the days ahead.
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