This column was originally published on RealMoney on Dec. 9 at 8:35 a.m. EST. It's being republished as a bonus for TheStreet.com readers.
I received a few questions on the
chart from Wednesday where I noted the pattern was bearish.
The obvious question was "why?"
Let's revisit the chart and take a closer look at what defines a bearish wedge.
First, let's go to
Technical Analysis of Stock Trends
, where they call my "bearish" wedge a "rising" wedge.
In a Rising Wedge ... there is a gradual petering out of investment interest. Prices advance, but each new up wave is feebler than the last. Finally, demand fails entirely and the trend reverses. Thus, a Rising Wedge typifies a situation which is growing progressively weaker in a technical sense.
Honestly, I don't know if that description is accurate.
But it doesn't matter: experience shows me that when I see a pattern like Apple's, I get worried if I'm long.
Therefore, a stop below the uptrend line -- which is always prudent anyway -- is particularly important at this juncture.
And that is the final word from Reagan National, where people always paint retirement as a time to travel. Now, assuming there is such a thing as "retirement" anymore, I have to admit my interest in traveling is about zilch. Is there anyone who can still put up with all the hassle involved?
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Johnson & Johnson
and the Philadelphia Housing Sector Index (HGX).
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Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.
Smith writes a daily technical analysis column for RealMoney.com and also produces a daily premium product for TheStreet.com called The Chartman's Top Stocks --
click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he appreciates your feedback;
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