From the Trading Desk

MTL 9-27-07 to 12-26-07

MTL is a lesson learned on selling too early soon after you see the stock top out (which I thought was the ultimate top) it broke hard below the 50 DMA. Since we were in a bear market I did not wait to see what might happen if the selling picked up so I sold my final shares. But teaching the importance of holding a leading Featured stock till it breaches the 200 DMA (if it does not give climax run signals like this one did not) you should always hold some for more gains. Had I done that instead of taking 100% from buy to top (three months), I could have made 232% in eight months, in the middle of a topping market. As you can see not too much longer MTL did in fact close below the 200 DMA. If you would have sold there you could have taken your final sell with a 128% gain a little under ten months, in the middle of a choppy go nowhere market. But if you were a “hopeful” fool and decided that you would see how it would act around the 200 DMA, you would have woken up to a RUDE AWAKENING on 8/15/08 as the stock CRASHED 37%. This is why you take profits on the way up and the reason I always use the 200 DMA as my final line in the sand. I never hold ANY stock below the 200 DMA–that means NEVER! I made a small mistake with this one and it cost me double the run it fully made. Lesson learned!

the buy:


the top:


the missed REAL TOP:


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