China Mediaexpress Hldgs (CCME -$3.02 or -14.48% to $17.84) violated recent chart lows and closed near the session low today with a second consecutive loss on heavy volume triggering a technical sell signal. Its color code was changed to green while early weakness raised greater concerns and it was testing recent chart lows. A negative reversal at its 52-week high on higher volume led to a close below its pivot point on Friday as it promptly negated its 1/27/11 technical breakout from a cup-with-handle type base.

Healthy stocks should not pull back more than -7% below their pivot point. CCME may find support above its 50-day moving average line and rebound, but disciplined investors know that limiting losses whenever a stock falls more than -7% from their purchase price is crucial to their long-term success.