“Trade of the Day” for Wednesday, December 17

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EPAM Systems, Inc. (EPAM) is a $2.2 billion technology company that provides software engineering solutions and technology services worldwide.

EPAM continued rising until just a few days ago despite an ugly long-term negative divergence that’s persisted since mid-November.

EPAM lost nearly 7% on Tuesday and fell beneath its rising 50 day SMA as its daily MACD nears centerline support for a reset.

Given the RSI now at 40 and price support quickly approaching, we’d look for a reversing candle off price support as an indication of time for long entry.

Then consider a closing stop beneath the tail on that reversing candle while looking for a short-term target of $52.00 to challenge the recent high.

A break above $52.00 on heavy volume could lead to a move up to $60.00-$62.00 based on the measurement of the late October breakout.

— Tom Bowley, Invested Central

Disclaimer: You should consider these educational charts and analysis for possible short-term trades only. We are not registered investment advisors and the Trade of the Day should not be viewed as investment advice. Accordingly, please check with your financial advisor before deciding to buy or sell any of these investment securities. Because we do not recommend holding a stock into its earnings report, please check all earnings dates on stocks featured before making a decision on whether to consider a trade. Invested Central’s staff may take long, or short positions in stocks, bonds, and other financial contracts on which they comment.

Tom Bowley, Invested Central

Invested Central Chief Market Strategist and StockCharts.com contributor Tom Bowley has taught thousands of traders around the world how to analyze the markets and make money trading.