WHEN TO SELL AN EXPLOSIVE SUPER STOCK
                                                           7/17/2009
                            (C) 2009 William Schmidt, Ph.D. www.tigersoft.com

    Sample 2009 TigerSoft Chart.   Note that the right side of the charts are unavoidably cut off.
     

                      WHEN TO SELL:  The Case of DRYS

       Let's review the most important set of conditions that should cause you take profits,
       and sell an "explosive super stock".   Take the case of DRYS.  This is an extreme case. 
       The stock had risen from 30 to 130 in 7 months.   The first clue of a top was (red) high
       volume  "churning" as the stock rose past 110.  This should have made us suspicious
       that the stock  was being pushed up past 100 to run in shorts, who were already down a
       lot of money.  TigerSoft's price bars turn red when there is usual volume.  Breakouts
       often bring red price bars.   Such red bars are usually bullish.   Bearish, on the other
       hand, are red price bars not taking place on a breakout but occurring after an extended
       advance.  The decisive event causing us to sell is the breaking of the 50-day ma with
       the Closing Power in a downtrend and below its 21-day ma along with the Accumulation
       Index no longer positive.

      The chart above shows that a complex distribution top pattern emerged over 100.
      The criss-crossing necklines were soon violated.  Very significantly, the (blue) Closing
      Power broke its uptrend.   Realize that after a long period when both Opening and
      Closing Power are rising, as was true for much of 2007 with DRYS, we can often see
      the top quite clearly by watiching for the Closing Power to break its uptrend.  The public
      (judging from the rising Opening Power) is still bullish.   But the professionals who had
       been buying changed their minds.  They shifted to selling after the opening; they had
       a lot of profits to take.  

       There were additional warnings that DRYS should be sold.  Below a small, but
       bearish, head and shoulders top has been circled in the stock's Closing Power. 
       In addition, the TigerSoft Day Traders' Tool quickly fell to new 12 month lows after
       the stock broke its 50-day ma.  This shows how much more downside action there
       was after the opening than upside trading.  The Day Traders' tool plots the cumulative
       difference between the day's high minus the opening with the day's opening minus
       the low.   And there were more bearish signs.  Volume was heaviest on down days as
       the top formation was made.  The Williams Oscillator was quite negative as the stock
       violated its 50-day ma.  Finally, consider how far and fast the stock had risen in less
       than a year.  There was very little technical support as prices started to fall.

          The temptation is enormous to buy back at lower prices a stock in which one has
          made a lot of money.  But look at the warning signs a stock usually gives if it has
          not safely bottomed.  DRYS illustrates this.  Look at all the warning signs it gave
          that the decline was not over.   By the end of the year the stock had fallen from 110
          to below 10, losing more than 90% of its value. Simply waiting for a confirmed move
          over the 50-day ma would have saved people here a lot of money.