Giving the Winners Room to Run

Tuesday's market performance was another example of why it's a dangerous market to be short. Yes, extended stocks are a dime a dozen, and good buying opportunities are getting harder and harder to come by, but these are not good reasons to be short. They are reasons to tread cautiously when it comes to new buys, but that's it. No reason to take profits and head for the sidelines.

Examples of extended stocks include Apple (AAPL), which is now 42% above its last buying area of $427, Priceline (PCLN), which is now 26% above its last buying area around $553, Lululemon Athletica (LULU), which broke out over $62 in January (shares closed Monday at $72.89), and Ulta Beauty (ULTA), which is now 19% above its last buying area of $76. There are scads of others as well. I can't stress the point enough: Don't chase extended stocks, or you could be sitting on a loss quickly....423 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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