MELA bounced a few days ago off the positive divergence on the daily chart. Here is the weekly chart showing positive divergence, falling wedge, oversold stochastics, all of which say that MELA has or is bottoming now and will see sustained upside for the months ahead. Note the February bounce out of the red falling wedge, this occurred due to the MACD and MACD histogram positive divergence, but, as seen above by the red lines, the RSI, stochastics and money flow all showed lower readings. The red circles were telling price that it can have a bounce now off the MACD but it needs to come back down for a lower low. Well, in June-July we got the lower low to satisfy the red circles.
Now you check the indicators again and the blue lines show positive divergence across the board, leading to the intial powerful pop last week. MELA is headed for sustained upside from here for the months ahead, the gaps at 3.8 and 5.0 are juicy targets. Watch for a potential mini-spank down from the 20 MA resistance at 2.9-ish, this would only give price a chance to pull back again to create a right shoulder for a bullish inverted H&S so watch for that. This H&S should it form will have a head at 2.2, neck line at 3.7, and would target 5.2 should the neck line give way to the upside. You can see how the 3.7-3.8 and 5.0-5.2 levels serve as attractive long term targets. Chart is set up nicely for a long term play.
For MELA chart use search box above for keystone speculator or view at stockcharts public charts list keystone speculator.