MGM-Jackpot?

On Wednesday, April 16th I posted MGM's 3C chart (click the link to go to the post) . I said,

"Falling Knife? Not usually a great idea to get involved with falling knives, but from what I see on my 3C chart (blue) and from the looks of the volume, I have a gut feeling that something is brewing here. The 3C chart is showing a very nice looking positive divergence in the "trade" time frame-like a swing trade. I don't know about anything longer (investment), but for my taste, this is about right-except for the falling knife part, but we get paid to take risk-just not too much.

I already had a small position in MGM, which has been taking a pounding, but I just started to really buy this am around $49.55 and $49.40. I'll wait to see how she reacts before adding any more, but I'm now at a full (regular size) position."

This morning, news hit for MGM (click the link). So MGM has had a pretty nice move this am. Here's a few updated 3C charts below.

The first is comparable to the initial post, it's a 5-minute 3C chart (3C blue with price). The second is an hourly chart and the third, a 1-minute chart.



Above, 3C 5-min. Look at the negative divergence near the top on 4/18. Price made a higher high, 3C made a lower high. This signalled some profit taking from the little run up. Also note the continued negative divergence today, again, profit taking-"Sell the news!"




Above, 3C hourly chart. The hourly chart suggests, despite the traders taking profits, there maybe a much larger element in play here. The April lows are sharply contrasted with 3C's higher lows as MGM bottomed. We'll have to see how this one develops.




Finally, above a 3C 1-min chart. The interesting thing here is the obvious confirmation of profit taking at the top of the 18th's rally. Even more telling, the accumulation which occurred throughout the day Monday April 21st. MGM is moving down, 3C is moving up. It seems clear that someone was building a position in anticipation of today's events.