Market Talk with Piranha is currently moving to its new home at chrisperruna.com. The new site is up and running but many of the posts need editing as the images and stock charts did not transfer successfully (thanks blogger). I will post all new entries to both blogs – Thank you for your patience while I make this change!

Friday, December 16, 2005

All Good Stocks Come to an End

...Last night, I officially removed Urban Outfitters (URBN) from the MSW Index and the weekly screens for the first time since January 9, 2004. Yes, just short of two years on this website (we only started to publish our screens on MSW in 2004). I was screening URBN on Richdad.com and Investors.com throughout 2004 before I had my own established community on the web. My screens can be found under the username “piranha526” on both forums.

Over the past few weeks, I have started to get the feeling that URBN was losing strength and was starting to turn. I can’t say that I knew it would slice through the 200-d moving average (a support line it has not sliced for two plus years) but I did see that is was starting to change the way it was trading. This past Saturday (12/10/05), I said this on the MSW Index:

“this stock may be seeing its last days on the MSW Index ($30.28)”

Well, several days later, it was removed at $26.51, still representing a very respectable 164% gain since it was first covered. On Saturday, the stock was still holding a 200%+ gain on MSW from early 2004 and reached a peak gain of 236% when the latest 52-week high was set at $33.77 a few weeks back.

I stuck with the stock in September and October when it challenged the 200-d m.a. but it never sliced the line the way it has this week. The violation of the long term support on above average volume was an instant sell signal with no questions asked. When something as uncharacteristic as this happens in a stock that has been trading above the moving average, you sell and you sell quickly to lock in all profits if you have not done so already. This action tells us plain and clear that the situation has changed and the stock is ready to move in another direction. There is a chance that it can come back but don’t sit and wait to see if it will. Get out, get your profits and wait and move on to another opportunity.

This was what I wrote last night on the daily screen:

URBN – 26.51, last Saturday, I said this: “this stock may be seeing its last days on the MSW Index ($30.28)” and today, this was confirmed. This is the first break below the 200-d m.a. in this type of fashion in years. Sell and lock in profits! Urban is the second stock this week to be removed from the MSW Index.

I will be preparing a case study on URBN, guiding you through all of our analysis over the past two years. The stock made several dozen weekly screens since 2004 (possibly 100+ daily screens) and gave members multiple opportunities to produce profits in this stock. The recent drop may be foreshadowing to a weak holiday retail season. I don’t know if this is why but come back and see what the news is all about in a month or so. The technicals always give you the story before it breaks! The key is to act now and find out later! Watch your other retail positions very closely.
Piranha

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home