Friday, October 19, 2012

Google - another example of following your exit signals

In my previous post I referred to the circuit breakers and trading halts put in place after Black Monday. By coincidence, we had a trading halt called in US giant Google's stock yesterday after it's latest earnings report was released into the public domain several hours too early, and which lead to a sharp plunge of near 10% in a matter of minutes.

However a quick look at the chart from a trend following perspective shows yet again the value of heeding the exit signals given by the system. There was a lovely uptrend in place from mid-July through to earlier this month, during which time prices rose about $140 from the entry signal to exit signal. As we saw in this other recent post, with a completely different stock with a minute market capitalisation in comparison to Google, the principles remain the same. When you get an exit signal, take it!

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