Thursday, January 25, 2007

Maximum Top

I'm not picking on MAMA here - this configuration has appeared on many, many stocks (cheap or otherwise) and will appear on many, many more in the future. I just want you to know that when you see it beginning to form on your favorite, must-have-in-my- perfect-(blush blush gush gush)- portfolio that you sell at whatever price you can possibly get and then avert your eyes - it ain't gonna be pretty - Sally Mae.

I call this "maximum top" and this is one of the bestest that I ever saw. First it is the third of three gaps up. Every candlestick analyst in the world knows that three gaps up is the death of any stock's upward momentum (we've discussed this before). Then it is accompanied by huge, blow-off top volume. (Just in case you didn't get the memo).

I call it "maximum top" other folks call it "oh sh*t oh dear there goes Christmas."

If you ever see it - run away and hide. (Or short the crap out of the stock if you can borrow the shares - your choice).

1 comment:


Its hard to predict a top on a stock.