Time To Chase; Time To Quit

  • June 18, 2001
  • Eddie Kwong

You
don’t have to give up on a stock,
 just because you failed to capture the
first profitable opportunity. In fact, a stock can give you a second and even a third chance
to make money if you missed the first signal.

Here is a daily chart of McDonald’s Corporation (MCD).
As you can see, MCD’s first warning sign came on May 22 after it failed to take
out the Feb. 14 high. The next few sessions, MCD attempted to break above
the high, but $31 proved to be strong resistance. On May 31, disappointed
sellers hit the stock, and MCD was pushed down to its 20-day moving average.

 

 

 

 

 

 

 

 

 


Breakdown players had excellent multiple sell signals when the stock fell below
its 20-day moving average and a short-term rising trendline on June 15. Look how
heavy volume was. In fact, it was more than twice its daily average. And today
(6/18/01), breakdown players are looking for one more opportunity. MCD is
approaching its support area near 28. 

Don’t give up. There will be always another opportunity.

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