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Strategies & Market Trends : Ask Vendit Off-Topic Questions

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To: Jill who wrote (6867)	3/30/2005 6:48:53 PM
From: Walkingshadow	Read Replies (3) of 8752

Note KKD.... textbook perfect short. A miserably failing stock that rallied into resistance (I shorted it on 3/23). Message 21164201 Since then KKD has gone down 15% from the close that day ($9.15) to today's close ($7.75). stockcharts.com[h,a]daclyyay[db][pb50!b100][vc60]&pref=G NOTE: see how the volume peaked as KKD rallied into resistance? THAT is a very strong signal that indicates increasing selling pressure, NOT increasing buying pressure. That is exactly what you want to see in a short that is rallying into resistance, and that in large part accounts for the subsequent 15% drop in KKD. This is often misunderstood... people think it is increasing buying pressure, but it is just the opposite. The professionals are not johnny-come-lately types, they are already in and that is what drives the stock one way or another. They don't buy in just at the end of a rally, but at the beginning, and that's what creates the rally in the first place. The volume surge represents professional profit taking and/or taking up short positions, NOT professionals taking long positions. This is a very very important point, IMHO. T

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