Re: Trailing stop for WNR .................................
I have shown my strategy on how to take profits via strong up moving stocks before. I will review that strategy again.
I use an indicator I call "Momentum Bands." They are the Bollinger Band indicator set to a 10,1 setting as opposed to a 20,2 setting. (This is my trailing stop for now.)
Once price moves above the upper band, you stay with the trade as long as price continues "to close" above the upper band.
When price closes below the upper band, for the first time, I sell 1/2 of my position. I sell the remaining half once price closes below the middle band in most cases, sometimes when price closes below the lower band if the bands are close together.
No need to jump the gun and take profits while price continues to close above that upper band, while those bands are headed in a northeasterly direction.
This simple little indicator allows you to maximize those steep upward price moves.
Message 24634281
Overhead resistance:
If you look at a weekly chart of WNR, note the area of price consolidation from January 08 thru March 08. This sideways to upward price movement has the largest amount of share owners who accumulated WNR during any other time while price dropped from $45 to $8.
These are what is referred to as the "praying people." They are praying for price to come up to their entry so they can sell and get out even, promising never to buy this stock again. We should see the upward price movement slow down as it approaches the bottom of that price range. I put the bottom of that price range at $16.50, give or take.
The praying people will be providing supply to market where we have had very little supply to offset the demand for WNR up until now, from where it bounced off the bottom. That supply (overhead resistance) coming to market should slow down price momentum, allowing those momentum bands to stop heading up at the accelerated pace they are now showing.
This is where I will take profits off the table using the above mentioned strategy.
It's too soon to tell how long that overhead supply will slow down price movement. I do expect it to slow down though, possibly even retreat. That's why I use the momentum band strategy. It allows me to catch the maximum amount of the explosive price move.
I will then keep WNR on my watch list because if price can move through that area of price consolidation mentioned above, we should see another strong price move from $25 to $33 without much overhead supply coming to market.
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