Staples is a great example of a broken stock. Not only was this stock down for 2010, it was
also a dog in 2011 as you can see from the chart below. But what I wanted to focus on what not only
trading with the trend - ie selling rallies - but how this stock acts on gaps
below a major moving average.
Just today SPLS gapped down below its 200day moving average
after finding some support there recently. If you look back to this time last
year it gapped below its 200day, then below its 50day and it was all downhill
after that. I would expect SPLS to act similarly this time around also as the
sellers dump a grossly underperforming stock for something else...and not ODP
because that dog also has fleas.
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