Near 50 DMA and Important Support After Loss On Heavier Volume Tuesday, August 24, 2010 - CANSLIM.net |
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Rovi Corp (ROVI -$1.72 or -3.96% to $41.58) gapped down today for a loss with nearly 2 times average volume, sinking near its 50-day moving average line. Below that important short-term average support is defined by prior chart resistance in the $40 area. Violations may trigger technical sell signals and prompt investors to limit losses or lock in profits, especially with broader market weakness (the M criteria) recently raising concerns. Meanwhile, it is reassuring that its earnings per share increases in 3 of the past 4 quarterly comparisons versus the year ago period showed better than +25% growth and it has a decent annual earnings track record in recent years. However, the M criteria of the investment system argues that 3 out of 4 stocks will follow along with the direction of the broader market averages. Members who are following along with recently published market commentaries have seen numerous reasons cited for increased caution. |
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