Omnicell (OMNC)

Company

OMNC 1yr
OMNC 1-year chart

"Omnicell, Inc. is a leading provider of systems and software solutions targeting patient safety and operational efficiency in healthcare facilities. Since 1992, Omnicell has worked with numerous healthcare facilities to enhance patient safety and allow clinicians to spend more time with their patients." (company website)

OMNC
OMNC 6-month chart

Sell short

Omnicell is enjoying a bounce during this week of stock market euphoria. The descending triangle formation in the chart, however, does not bode well for the rally to continue. I expect resistance of the downtrend to reassert itself. I am relying on the chart formation and discounting the PPO indicator in this case.

  • Percentage price oscillator (PPO) — above the signal line and diverging
  • Volume — fairly low, with no high-volume days in the latest rally

Based on technical analysis, MarketEdge calls OMNC a "short candidate" in a "strong downward trend."

Buy to cover

gain Bottom line
-7%

I've been worried about OMCL ever since it bounced back up from the short-term trend line — the symmetrical triangle pattern is very near complete. Market Edge was still calling to "hold short," but when I saw that OMCL was breaking above the triangle today, at a time when the market was reeling from news about GM preparing for a possible bankruptcy filing, I decided to bail. It continued to rise, ending up the session above my cover price.