But there are two indicators that suggest short-term traders on the long side should be on high alert. First, the pink lines show that this latest breakout, while on solid, confirming volume, has created a negative divergence - a sign of slowing momentum. I tend to ignore this signal when the breakout has just occurred on rising volume. After all, can it really be argued that there's slowing momentum when a stock closes at a fresh all-time
high on rising volume? Ok, I'll so ignore that signal for now. But the bigger problem could be options expiration Friday, which is just two days away. ADSK shows "max pain", which is the point where in-the-money call premium exactly equals in-the-money put premium, at 208.30. That's more than $32, or 13.55%, beneath the closing price on Tuesday. While I would never suggest that ADSK is on the verge of losing 13.55% over the next couple days to a week, I do think
ADSK could have trouble moving higher given this option backdrop. It will be interesting to watch ADSK over the next couple days and perhaps into early next week.
Happy trading!
