Healthcare IT firm Catamaran Corp. (CTRX) has been slugging it out sideways for the last six months, but that could be about to change thanks to the setup that it's been forming along the way.
As Catamaran consolidated sideways, it's been setting up an inverse head and shoulders pattern, a price pattern that indicates exhaustion among sellers. And after the 70% climb that this stock has been on year-to-date, it's easy to see why sellers are exhausted right now. The inverse head and shoulders is formed by two swing lows at approximately the same level (the shoulders) that are separated by a deeper low called the head.
For CTRX, the buy signal comes when shares push through the neckline at approximately $52. When that happens, it's time to jump onboard this stock with the buyers. I'd recommend sitting on the sidelines in the meantime.
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