MER – A Breakout Story

Looking at the three-year chart of MER, it’s been inside the triangle for quite some time. The upper line seemed like a very strong resistance until recently that we saw MER’s breakout.

Take a closer look at MER’s weekly chart:

There’s what we call a ZEUS STRIKE wherein moving averages are perfectly lined up to each other.  Conventionally speaking, it happens when

20EMA > 20SMA > 50SMA > 100SMA

Seeing the breakout, plus that beautiful legendary strike, I put nearly half of my port in MER without hesitation.  And Zeus didn’t disappoint! :) One month hold gave me 17% profit  (not bad, i guess). 

What made me sell the stock is the following chart:

Looking at the weekly chart, MER is already at the top of a channel that we do not know yet if will be broken or not.  It’s better to be at the safer side. :)

Plus, knowing that the market has gone up too high already, we may see profit taking on several stocks which does not exclude MER. We can always buy back when the direction is clearer. On my part, i will buy when it breaks out of the channel and if not, will wait at the lower end. Patience is the key! ;-)