12% gain on an 8-day hold – Nuance Communications ($NUAN)

Here is a review of a recent long entry into Nuance Communications ($NUAN), which we recently sold for a 12% gain with an 8-day holding period.

In the pre-market on January 5, subscribers of the MTG Stalk Sheet were alerted to a potential breakout setup in NUAN.  Below are two charts that are snapshots of the price pattern at that time. The first chart below shows the breakout action on the longer-term monthly time frame, while the bottom chart shows the tight consolidation pattern on the daily chart, which was holding above the 50-day moving average. We have also labeled our buy entry point from that day, along with our initial stop price:

As anticipated, the NUAN buy entry triggered on January 5th. Below is the price action subsequent to our entry:

As the chart above illustrates, we locked in a 12% gain (on an eight day hold) in NUAN by selling into strength of the slight gap up on January 17th.