Another Lesson Learned from GEO , NI & BHI

A lot of traders  have been disappointed today after GEO, NI, BHI lost  up to 5 -8 % each.  Today we learned another lesson  " Don't trade Overextended stock".  What is an overextended stock? As explained by Mr Tom Willard   is shown on the picture below:

Overextended_Stock

When the stock price moves too far from the EMA or SMA line and the slope becomes too steep , the stock is said to be Overextended .  And when this happens its too risky to trade and one needs to be very cautious  not to add more to his current trade. If you have stocks like this , its better to sell while its high . A very good example  below is GEO

GEO_overextended

GEO together with BHI , NI , DIZ lost for 2 consecutive days after the profit taking  of the big traders.

Here is another one that lost  BHI .

BHI_Overextended

Remember the Lessons : Be safe & Follow the strategy for  Happy investing !