Don't Tarry When Reason for Trade Is Gone

I ended last week by closing some shorts -- one winner and one loser. The Google (GOOG) short from $780 is now history. This stands as a reminder that technical patterns don't always work. The head and shoulders pattern seemed to portend a coming drop in Google, so that's how I played it. Once the stock recovered to trade above the neckline at $794, it was impossible to justify holding the posi,tion.

Friday's rally simultaneously pushed the stock above horizontal resistance (black line) and a vertical downtrend resistance line (blue). The move occurred on better than double Google's average volume. The move Friday negated my reason for the trade, and I was always taught that when the reason for your trade is gone, you should be gone, too...419 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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