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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (40560)	1/2/2004 1:36:58 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69207

A Good Stock Often Shows Multiple Sell Signs At The Top Frid,ay January 2, 10:05 am ET By Jonah Keri Investor's Business Daily In Wednesday's Corner, we looked at the cues investors sho,uld take in deciding to hold onto a strong stock during a mild correction. Strong upside reversals, light volume on the downside and support at key levels all made NetEase.com worth holding through the summer. But just as it's crucial to closely follow a stock's daily price and volume action to know when to hold on, it's equally important to do the same when looking for sell si,gnals. To bag the biggest gains, it's important to stay on your toes and not let a stock crater on you. A great gain that gets reduced to a good one after several days of heavy selling annoys. A great gain that you let round-trip all the way back to zero is a missed opportunity that'll set your portfolio back for a long time. W,hat are some of the telltale signs? After a stock makes a long run-up, watch for it to forge new highs in below-average volume. You want to see volume increase as a stock rises (and subside on the way down). Repeated new highs in light trade may indicate that institutions - the big guns that drive great gains - don't want to get behind the stock. Such action often portends a nasty sell-off just around the corner. , Churning can also foreshadow trouble. It occurs when a stock flashes heavy volume with little price movement over a span of several days or weeks. Such action suggests a struggle between big-money buyers and sellers. In that situation, the sellers often get the last laugh. When a stock hits a new high, watch how it acts. A sharp reversal that same day to the downside in huge trade may k,ick off the start of a nasty decline. Finally, if a stock falls on its heaviest daily volume since its breakout, that's a danger sign that the end of the run may be near. When we last left NetEase, the stock had flashed a strong upside reversal off its 50-day moving average in early August. At that point the Chinese Internet portal and Web services provider had notched a 150% gain since its April 7 breakout. , NetEase vaulted to a new high Sept. 2 in brisk trade (Point 1). But as September rolled on, the stock flashed multiple new highs in light trade, capped by a new peak Sept. 23 in quiet volume (Point 2). Those who sold bagged a 285% gain from the pivot point. The stock then corrected sharply, but NetEase found support at the 50-day, suggesting its run still had legs (Point 3). , The second signal to sell shares hit Oct. 9, when NetEase reversed from a 6.1% intraday surge to a new high to close up just 2 cents (Point 4). That kicked off another correction. The final nail came Oct. 21. That day, NetEase dived 12%. More worrisome than the price drop itself, 10.3 million share,s changed hands, the heaviest since its breakout (Point 5). Though NetEase remained a big winner at this point, the stage was set for a breakdown.