We indicated that we would use the 50-day moving average as our selling guide on TTM. This is because the stock does not show that it tends to follow the 10-day moving average, hence the Seven Week Rule, whereby a stock must show that it obeys its 10-day moving average for at least Seven Weeks, indicates that on TTM we do not use the 10-day, but the 50-day moving average as our guide for a stop. Given that this is a ways below where TTM is currently trading, one could also use the 20-day moving average as a quick stop, or one could also use the Market Direction Model if it gave a sell signal, selling the stock wherever it is trading when that occurs, depending on your risk preferences and tolerance.
PPR - Follow-up Comment to Tata Motors (TTM) - TTM
|Published:||9 Sep 2010 20:02 ET|
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