It’s not all rosy for all-time highs these days. Tonight, CROX was bludgeoned after closing at an all-time high and ‘missing?’ numbers.
I long sold this trendy biiitch. Still love the products. Until tonight my sells looked stupid, now just less so. The lesson is that trends end.
Expectations get too high, stocks get too loved, investors become complacent…now that CROX has a severely halted trend, the stock will act much differently. The shorts will become emboldened, especially those that just did so the last few weeks. A much bigger tug of war between the lovers and haters will take place. Here is the Whole Foods piece I did last year on Wallstrip that walks you through what happens when stock trends end. TIME is what the stock will really need now.
The end of Brian’s video tonight is a great walk-through of what can go wrong:
Wellcare (WCG) is an awesome example of why you must sell when given a chance. If you do this long enough, you just have stocks like these. Based on the tremendous runs in leading stocks, I expect much more of these scenarios over the next few years.
No strategy is perfect. Don’t fall in love with broken trends. They can end with a bang or a whimper but will eat your capital and spit you out if you get lazy or complacent.