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February 13, 2006 at 8:14 am | | Comments 1

Still Ugly!

"Look away, I'm hideous!"

Back on December 6th, I gave a chart review of MOVI, which was a downtrending stock. The point of the article was to avoid downtrending stocks.

Although MOVI appeared “cheap” at that time, lower highs and lower lows were in place and there was no reason to believe that was about to change. Here’s a look at the chart I showed back in December:

Downtrending Stock MOVI continues to trend lower, and buying a “cheap” stock would have been costly!

MOVI put in some horizontal price action following my post, but that was merely a pause in the poor action. Trends followed by horizontal price movement are often followed by more trending in the original direction, which is what MOVI is still doing.

Ugly Stock MOVI is down another 40% since I reviewed it within its downtrend, which certainly counts as hideous!

This stock is once again moving lower (down 40% since my review of it – ouchie!) and getting “cheaper” for those who believe in the stock’s fundamentals. Imagine their pain!

The moral of the story is still the same: stick with the technicals and avoid buying stocks in downtrends. Make sure that a stock you’re considering buying has some potential to rise in price and make a higher low and a higher high. Don’t let today’s prices compared to historical prices be your basis for buying a stock, because cheap stocks only seem to get cheaper. You’ll save yourself a lot of money and be able to focus on good opportunities instead of babysitting trades resulting from poor decisions.

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com