Edwards Lifesciences Points Lower

Last December, I wrote that medical device manufacturer Edwards Lifesciences (EW) was a buy at $69.80. The stock had broken above an important resistance level at $67.50 and the momentum and money flow indicators were all moving higher. Over the next month, the stock gained 12%, and then dropped sharply in early February 2012 after a poor fourth-quarter earnings report. It pulled back to retest the $67.50 level in March and again in April, then surged 40% higher in May and June after breaking above a downtrend line and taking out its 21- and 50-day moving averages. The stock has been moving sideways in a narrow channel pattern since, and the technical picture is now pointing to lower prices.

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