HeartWare International could start a technical downward trend after the rebound in recent sessions.

From a fundamental viewpoint, firstly, we note the high valuation of the company. Even if the company manage well the research process, no profit is expected before 2016.

From a technical viewpoint, the proximity of the USD 97.1 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: HeartWare International has all the characteristics for short selling. The first objective will be fixed near the USD 83.52 short term support and by extension the USD 70 area. This strategy should be protected by a stop loss above USD 97.15.