The stock has been in a downtrend channel since April. Yesterday you may have looked at the chart and thought it was a good time to get short - AUY was bumping up against the downtrend roof, and it couldn't close above it. Today it broke out of that channel on heavy volume.
So how would you have known yesterday that getting short was a bad idea? Simple - you could have looked back at days when shorting ended up being a good idea. Then you would have seen that yesterday, unlike the other days, lacked bearish confirmation.
Bearish confirmation includes:
- Stock falling from 50-day MA
- Stock falling from trendline roof
- Stochastics hooking down from overbought (80) territory
- MACD Histogram heading lower
Click on the chart to read my explanation.
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