Hard Left Side Price Break
Note: The historical stock examples given below are for EDUCATIONAL USE ONLY. They ARE NOT to be used to make buy/sell decisions in today's market. For more information, please read the HSR Terms of Use.
Description
Price breaks hard and plunges through its 10 Week MA on wide range AND heavy volume.
Behavior Note: The Hard Left Side Price Break differs from the First Close Below the 10 Week MA because its price range is usually wider and makes up a majority of the left-hand side of a base.
What you need to know
Don't let Hard Left Side Price Breaks turn your attention away from a stock.
They can look ominous at times, but they're more common than you might think.
Tip: Use market context to analyze Hard Left Side Price Breaks.
One way that you can evaluate Hard Left Side Price Breaks is to distinguish between breaks caused by general market weakness and those that develop independent of the market's action.
Hard Left Side Price Breaks that occur during general market weakness are easier to overlook because they are likely related to the market's negative action.
On the other hand, Hard Left Side Price Breaks that arise separately from the general market may require more detective work.
Is it a sign of trouble for the stock or just one week of bad price action?
In most cases, Hard Left Side Price Breaks aren't too significant if they can be overruled by more important "big picture" factors/dynamics.
Some of these may include: positive group action or a bullish backdrop for the stock market.
Historical Stock Chart Examples 1A & 1B: Nike (NKE) 1994-1995
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Click to enlarge 1A
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Click to enlarge 1B
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Historical Stock Chart Examples 2A & 2B: Nam Tai Electronics (NTE) 2003
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Click to enlarge 2A
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Click to enlarge 2B
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