Page 1244 - How to Make Money in Stocks Trilogy

226 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

The stock may bounce back down the road, but that type of sudden sell-
off is a trend-changer: Chances are high the stock will continue to move far-
ther south.
In the context of this sell rule, let’s revisit the charts we saw for
OpenTable earlier in “Chart-Reading 101.” The company had carved out a
profitable niche with a new platform that lets restaurants take online
reservations and market to their customers. It was a young, innovative com-
pany and a market leader—until its trajectory changed sharply in the spring
of 2011.

OpenTable – 2011 Price
Daily Chart
1 Biggest single-day drop on heaviest
volume in months
2 Gap down: Even bigger drop on even 2
heavier volume the next day further shows 1
big investors are dumping shares 100

Light-volume up days
shows weak buying
80
© 2013 Investor’s Business Daily, Inc.
1 Volume
2
2,000,000
1,100,000
600,000
300,000
17 31 14 28 11 25 11 25 8 22 6
January February March April May
A huge price drop on heavy volume shows big investors are aggressively selling.