When Good News Doesn't Move the Stock

This requires only brief treatment: the bottom-line answer is that it is time to sell without delay. One of the definitions of a bear market is a time when investors do not care about good news. Applying this logic to individual stocks, if good news fail to elicit positive stock-price action (in a reasonably hospitable stock market climate), there is no longer enough unsatisfied buying interest in the stock to push it higher. The excitement has passed its peak; volume will be unable to build to new highs, and the price must endure.

A sophisticated stock market observer can use this insight as a signal to cash in, while others less savvy stock traders use the latest good news as reason to buy the stock. Unfortunately, they fail to realize that they are buying into distribution and are starting too late to be able to win this game.


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