I shorted IYT early on Tuesday; it ended the day with the first bearish engulfing pattern it's had in quite some time.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Nutrisystem is one of about a thousand charts I follow. I hadn't really done anything with the stock, but I was following it with interest since it had, from October to December, climbed about 50% in price, and subsequently retraced the entire gain back to its former resistance level. I have tinted in green a huge open gap in the chart, which it never came even close to closing.
What's interesting about the chart above is what happened in the blue tinted area. It's perfectly OK for a stock to retrace to a former resistance zone – – particularly one so long-lived. What isn't OK is what happened below, tinted in magenta:
This was a huge "heads-up" to anyone either long the stock or contemplating going long the stock – – mainly because What Was Supposed To Happen Didn't Happen (that is, a continued climb away from the support).
Today NTRI lost over 15%. The good news for technical analysis is that this debacle was telegraphed over a week in advance by the price action mentioned above.
Originally posted on TheTechTrader.com