I recently saw an entry on another financial website asking what’s wrong with WWE and if it was presenting a buying opportunity. Of course I clicked in and saw that the writer was long from the high 20s (still). I took a look at the chart and started writing a response to the question, then decided that my own readers would be better served from the “lesson.”
The short (best) answer is that the stock warned all observant enough to see it not 1, but 4 times that it didn’t feel well. The red lines on the chart above show 4 separate interim lows that were violated in succession before the unceremonious halving of the company’s market value in one day.
There were plenty of opportunities for holders to get out of this stock around $26, $19 and, at worst, $18… but did they? I mean really… How wet must you get to know it’s raining?
Yeah, I said it.