Pretty unimaginative title, still that’s basically the best description I can come up with to describe what happened today. I have been trading long enough to know it is imperative to respect warning signs. Today ANO – Anooraq Resources sent one of the most powerful warning signals you can possibly expect. SWC – Stillwater Mining and PAL – North American Palladium were up nearly 10% during the day and closed the day being up around 8%. ANO – Anooraq Resources on the other hand closed the day being down 2% and was down almost 10% during the day. Whenever a stock doesn’t move along with its sector peers that raises a red flag.
What is even more important though is something I have written about quite a few times in the past. As a trader you analyze a chart and then draw your conclusions. Put another way, you build up expectations and stocks that end up being great trades usually meet your expectations. Whenever a stock doesn’t meet your expectations that is a big warning. Something might be wrong with the stock, something might be wrong with the market, something might be wrong with your analysis or your timing. It doesn’t matter. What does matter is the fact ‘something’ might be wrong. As a trader I respect these signals and act fast. Sell and ask questions later.
There’s never a shortage of opportunities in the markets. If you keep that in mind you will be more comfortable selling when there are warning signals. Your goal as a trader is to be in control of your trades. Not the other way round. My job is not to be right, my job is to evaluate and control risk.
That being said the overall chart of ANO – Anooraq Resources still does look bullish. The markets could pull back any time and that’s why I am not willing to be very patient. If you are still in make sure not to let a winning trade turn into a losing trade. That will not only preserve financial capital but also protect your mental capital.
When in doubt get out.
My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469
Have a great evening!
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