My Baby Supervalu Turns Ugly

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Date Bought: Dec 22, 2010

Price: $9.16

Quantity: 8,100

Reason Bought: 

1) All technical indicators point to a buy.

2) An upward gap up candlestick points to a strong push upward.

3) Stable fundamental Earning Per Share of around $0.30 each quarter

Date Sold: Jan 10, 2011

Price: $8.50

Quantity: 8,100

Reason Sold: All technical indicators point to a sell. It also broke the important support at $8.70. The next day after I have sold, the stock tumble more than 11% after Supervalu announces a poor quarterly earning. I believe that some people have already gotten the inside news and dump this stock earlier on.

Profit/Loss: -$5,200

Mistake: Under my latest post "Supervalu approaching the great resistance", I have noticed that Supervalu is losing the upward momentum. I have overlook the seriousness of this resistance. I admit I am also a little greedy hoping for more gain.

Even though I have made a serious mistake on this trade, I am also glad that I have took important step which is to cut my losses. If I have hold on to this stock, I would have lost more than $15K or more by now. As for the future direction of this stock, I would say that the downward move for this stock continues to be very strong and unstoppable.
 
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