Cerner (CERN), a health care information systems concern, broke its 2008 sell channel with conviction this week with an 'extra large' 5-day gain, closing at $40.68 with a $1.49 gain, 3.8% in yesterday's weak tape.

Q: How has CERN performed after printing an 'extra large' 5-day gain under its 200-period simple moving average?

A: According to the 7 previous occurrences of this event, CERN has shown a very strong bullish edge that peaks 21 trading days after the event. CERN rallies in 100% of the cases (7 of 7) by an average of 12.4% relative to the close on the event date, providing a target price of $45.72 by Wednesday 7 May 2008.

Consider letting this trade come in a bit, looking for a pull-back entry in the 39.02-39.50 area.

Mr. Jay Pasch³ is a private futures and equities trader based in Minnesota. He may hold positions in the instruments mentioned in his trading ideas.

Let variable values:
@	=	GII.CERN.NASDAQ
theEvent	=	IF
   5 value percent_move of @  is more than
   (30 day average of 5 value percent_move of @   +
    (3 * 30 day std_dev of 5 value percent_move of @
    )
   )
AND
  @ is less than 200 value average of @
THEN 1
ENDIF


      Date   Day           t+17           t+21           t+22           t+50           t+51

07/21/1989   Fri           17.4           17.4           17.4           17.4           17.4
07/27/1994   Wed           10.7           17.9           20.0           12.1           11.4
11/25/1996   Mon           -2.5            0.8            2.4            4.5            5.0
04/20/1998   Mon           18.1           14.5           18.1           15.6           18.1
04/10/2001   Tue           17.6           14.0           10.9           26.1           19.8
01/03/2003   Fri            6.6            6.0            3.3            0.2           -1.7
07/21/2006   Fri           15.9           16.1           16.1           15.4           15.6
04/08/2008   Tue            NaN            NaN            NaN            NaN            NaN

             Avg           12.0           12.4           12.6           13.0           12.2
          AvgPos           14.4           12.4           12.6           13.0           14.6
          AvgNeg           -2.5            NaN            NaN            NaN           -1.7
          PctPos           85.7          100.0          100.0          100.0           85.7
          PctNeg           14.3            0.0            0.0            0.0           14.3
         Maximum           18.1           17.9           20.0           26.1           19.8
         Minimum           -2.5            0.8            2.4            0.2           -1.7
          StdDev            7.7            6.5            7.2            8.5            7.9
           ZStat            1.6            1.9            1.7            1.5            1.5
        Variance           58.9           41.6           52.4           73.1           63.0


8 Occurrences

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Web Address of this trading idea:

http://www.markethistory.com/subscribe/best_of/content.html/13864.html

Links:

¹ http://www.lim.com
² http://www.markethistory.com/content/analog/analog.html?ticker=CERN
³ http://www.markethistory.com/staff/detail.html?s=pasch

Cerner Corp - A Healthy Reversal

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