Question 82—Handling a Profitable Trade
Answer 1 Sell and take profits.
When a rally goes vertical, it is extremely difficult to forecast where it will end. At the rightmost bar on the chart we see that, for the first time since the stock blew through its upper channel line, it failed to reach a new high. This reduction of momentum flashes a signal to take your money and go home. Additional support for this decision is provided by MACD-Histogram which has reached a level consistent with tops. Also, you can see here that the tall peaks of the Force Index are usually followed by a period of flat prices rather than a continuation of an uptrend.
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