NVGS Navigator Holdings – From False Moves Come Fast Moves

by Olivier on October 13, 2014

Here’s an educational follow up post on NVGS – Navigator Holdings a bullish all time high set-up I highlighted a while back. The stock ended up trapping longs as the break to the upside ended up to be a false move. Hence the saying:

‘From false moves come fast moves.’

Click on NVGS chart to enlarge:

The chart is a great example why being disciplined is so important and why protecting one’s capital is key. The only way to successfully protect one’s capital is to heed warning signs and to act promptly as soon as the technical picture changes. NVGS was looking great. A bullish triangle breakout to the upside and new all time highs. What else could one wish for? Actually not much else. Even the volume pattern was looking extremely constructive at the time.

The lesson to be learned with NVGS is to keep an open mind at all times. Objective price analysis told traders to sell almost immediately after the entry. The red arrows I drew into the chart show the red flags NVGS raised:

  • Small gap down. With strong stocks you want tight bullish consolidations.
  • Long black candle falling back into the pattern. The pattern itself didn’t act as support.
  • No respect of major moving averages (20, 50, 200). No bounce whatsoever.

Waterfall decline charts like NVGS exemplify why I keep posting select quotes from veteran traders like:

Martin ‘Marty’ Zweig: It’s ok to be wrong: It’s unforgivable to stay wrong.

Linda Bradford Raschke: When the ship starts to sink, don’t pray – jump!

From false moves come fast moves.

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