Don't Get Out of Dodge

This column was originally published on RealMoney on Aug. 14 at 10:03 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

A reader has asked for clarification about a comment in Friday's column that an uptrend on a chart had been "consistently capped by ample supply."

Do we know that a supply imbalance stopped the uptrend, or could it have been caused by something else? This is an important question because it pinpoints some of the confusion in the study of charts.

An uptrend can only be halted by excess supply at a particular price level. Only when supply outweighs demand will an uptrend stall. There can be no other reason. ...