NEM Update

This was a trade idea from 12/10/2010 and looked like it would be a good trending trade, it has been. Since a few members are in the trade-I've received to emails about it today, I figured we'd take a closer look.

 December 10th Trade Idea featured on the site. As you can see, it was a top and the short call worked out well as support has been broken.

The trending stop has kept you in the trade the entire time.

Now if you wish to use a tighter stop, here's a few alternatives

 This stop is a standard deviation tighter.

This is a swing trade based stop if you want to try to trade around bounces. Every time NEM moves down, the Trend Channel will lock in further gains so keep in touch for the latest or if you are using Telechart or StockFinder (click the links for more information on the two charting platforms I use) I'll be glad to share the Trend Channel formula with you.

The break of support is important, especially the increased volume we've seen. Here's a 3C perspective on the trade.

10 min 3C chart showing distribution right before the break of support-yes smart money is smarter then most people realize and act before most people realize.

The 5 min chart shows a little Specialist accumulation preparing for a bounce which is perfectly normal, especially after the break and volume. Even being short, if we have a trend-term perspective, bounces are healthy in keeping the stock from becoming oversold and going into a major bounce. Which stop you choose depends on your trading style and what you are comfortable with. If you need any help or have questions, as always, email me and I'll do what I can to help.