We're seeing the exact same setup taking place in shares of mid-cap drug maker Covance ( CVD). Just like Becton, Covance has been trending in an uptrending channel since back in November, bouncing off of trend line support three times since then. Now shares are testing bounce number-four.

I mentioned earlier that the ideal time to buy an uptrending channel trade is on the bounce off of support, and Covance is a textbook example of a low-risk entry. Shares pushed right off of that uptrend line in yesterday's session, and if we see continuation today it makes sense to be a buyer.

All of that said, contingency plans are important even in textbook trades. That's why I'd recommend keeping a protective stop right at the 50-day moving average.

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