Today I got out of CBE for a 3.86% profit. I expected to make close to 4% and was very happy with the outcome.
To explain my chart a little further, in VSA you want to see healthy volume. What this means is that the volume should increase in amount relative to how long the stock’s range is. If the stock’s range was about twice as big as normal, you want to see volume about double to know that the move is supported and healthy.
The problem with CBE is that yesterday, the range was wide, but the volume was very excessive and unhealthy. This signals to me that there is selling mixed in with the buying and the supply really came out in today’s price move.
I will continue to watch this stock, but I don’t expect it to move above the resistance.
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