Friday, November 5, 2010

Intraday Dip

Certain stocks in rally, have an unusual dip during the opening of the day. This dip goes around 10% below the 30 day moving average. One has to be caution to keep the Stop Sell more than 10 % to prevent this kind of sell off of the stock. This happened to me with HS. I should have got back into it immediately but did not and that caused me significant loss. Anyway, this is a lesson to learn to always keep the Sell stop more than 10 % on these low capital and low number of share stocks. It usually happens when some one has dumped the shares and took the profits. There is a high volume with the plunge of the price. This means someone has dumped the shares. 
Unusually, these stocks come back to previous levels the next couple of days. It is a very good point to buy and make good profits right way. One has to wait, wait, wait, till it is good time to buy on the dip in the rally. 

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