Gotta Smoke ‘Em When You Got ‘Em

By Chart School

July 25, 2010

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Gotta Smoke ‘Em When You Got ‘Em

Courtesy of David at All About Trends

Amazon (AMZN) was featured in our newsletter as an ideal short-sell set-up.

All it did was rally on light volume back up to resistance at its downtrend channel line.

It’s at that point, we initiated a short-sell position in this issue.

Prior to its earnings release, we decided to stay with the issue and hold it through earnings because the issue had overhead supply at the moving averages was overbought and had just made a short-term run.

And kowabunga! After it reported earnings, AMZN imploded and dropped over 16 points in after hours. That’s where we locked in our gains.

Anytime the market gives you that type of gain fast you take the money and run! Never look a gift horse in the mouth as they say. And good thing too as it is closed Friday pushing $119!

Why did AMZN turn into a home run? Plain and simple WE were willing to take the risk knowing full well it could have resulted in losses (That’s called being grounded in reality).

“IF YOU ARE NOT WILLING TO TAKE THE RISK DO NOT TAKE THE TRADE.”

And, we took the profits when we got ‘em.

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