Of course, alert traders would have been aware of this for a while now - banking stocks for example topped out early last summer, before 'Credit Crunch' became the phrase used in every news bulletin.
Below are two charts of fallen favourites that topped out a while ago, and have since been in a down trend, culminating in the share price falling off a cliff this week - Tanfield (LSE:TAN) and Southern Cross Healthcare (LSE:SCHE).
Even if you are by definition a long term holder, you should always keep an eye out for the warning signs.
Trend followers have no preference whether they make money on the long or short side - all they care about is being on the correct side. No doubt trend followers who were short of these two stocks have had a very profitable week. As for me, I managed to put my money into other stocks and missed both of these.
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