BSX (Boston Scientific Corp) was one of the recently highlighted short trade ideas on the medical device sector. Since the video, BSX has continued lower & is now at two key support levels: The 21.55ish horizontal support level which is roughly defined by the top of the large April 27th gap on the daily time frame as well as the primary uptrend line which forms a large bearish rising wedge pattern on the weekly time frame.

The significance of these support levels lies in the fact that if BSX fails to hold the 21.50ish level, the stock will have entered that large from late April. Gaps, once entered from above or below, are often back-filled, which in the case of BSX, would mean a drop down to the bottom of the gap which comes in around 19.90; about another 8% below where the stock is currently trading. Should BSX enter & back-fill that gap soon, that would have longer-term bearish implications as it will have clearly taken prices down below that large bearish rising wedge/primary uptrend line on the weekly time frame. With very clear & powerful negative divergences confirming the bearish nature of that weekly rising wedge pattern, my expectation is for a Boston Scientific to fall to any or all of the three support/target levels shown on that weekly chart (roughly 19.00, 16.40 & 14.00).

On a related note, although I outlined the bearish case for BSX as well some other medical device companies & the sector as a whole, BSX was not added as an official trade idea yet. One of the reason for this is due to the fact that I’ve fallen behind on updating the existing trade ideas with quite a few recently either exceeding their maximum suggested or reaching one or more profit targets. I started to update the trade ideas last night & will continue to do so this week by removing any completed trades or setups that no longer look compelling in order to make room for some new official trade ideas, such as BSX. Of course, many of the unofficial trade ideas play out for large gains & one of the main reasons that I limit the number of official trade ideas is that each official trade idea is updated from Trade Setup to Active Trade (often with updates along the way as each price target is hit) and once again when trade is completed by either reaching the final price target or maximum suggested stop. Therefore, don’t hesitate to trade an unofficial trade idea if you like the chart pattern & agree with the analysis. I’m also glad to provide updates to both official & unofficial trade ideas when requested.

As such, I’ll only be checking in the trading room & replying to questions periodically as my primary focus for the remainder of the week is to update the trade ideas, both active & completed. As several of the trades that have already stopped out or hit one or more profit targets were already mentioned in the trading room, email notifications will not be sent out on any trade updates this week unless they are time sensitive.