One of my favorite medical stocks Biotelemetry (BEAT) provides cardiac monitoring systems and cardiac core laboratory services across the US. They went public opening trading just above $17/share in Mar 2008 just before the market melted down. They found a bottom in July of 2012 at $1.85, some 90% below their IPO. Since then the ride has been just as crazy as they have risen almost 1200% since then, riddled with plenty of volatility to test an investor’s staying power.

I have actively been looking for a time to enter as the chart above looks as if it has a lot more upside … eventually. Buying now is not in the cards for me. Even though price has been staying nicely above a rising 200 day moving average, it is butting up against the top of a rising wedge pattern while concurrently creating negative momentum divergence. The school of hard knocks has taught me to avoid “opportunities” that share both of these negative characteristics. As such, I will wait for the pullback I expect to occur out of the wedge. Why? The downside target if the pattern plays out (and potential loss if I enter now) is back down around $13, more than 40% from where it closed today. The upside opportunity, is not worth the downside risk.

If I am wrong? It isn’t the first, nor will it be the last time. Opportunities are like buses though, hang out long enough and you will be able to catch the next one.