Crocs (NASDAQ:CROX) stock chart offers great insight into how fast trends can take off and lead stocks soaring into new highs. And, in the case of Crocs the saying of, "what goes up must come down" holds true.
By applying simple technical analysis traders can view key buy and sell signals, resulting in smarter and more profitable investment decisions.
In two years CROX ran from $15 to over $75 all the way down to under $5. Take a look at the following stock chart of Crocs (CROX) which highlights its breakout and then read through the numbered points for an added explanation.
1. CROX breaks out past $28 to start its huge run and after four days gaps to $35 a share after blowing out earnings.
2. CROX sets up a small bull flag and breaks above $40 offering investors a 2nd key entry point.
3. What was originally resistance at $40 a share becomes support as the stock finds support before running to new highs at $50.
4. CROX sets up a small bull flag and breaks out past $50 resistance. The stock hit another new high above $60 just four days later.
5. CROX first major sell signal as the gap range was tested between $52 and $54. The stock soon after collapsed back into its base and found support at $44 before running back up to $60. Investors would have another chance to enter the stock with the next breakout (6).
6. CROX breaks past $61 resistance in late September and starts its last leg up towards its ultimate high of $75.21 which was reached on 10/31. The very next day though sour earnings sent the stock crashing back below $50 a share (7).
7. Any long position should have been automatically exited at this point. The massive gap down is a great example of something unexpected and out of investors control. Traders that accepted any losses and walked away would be happy they did so in the long run.
8. CROX breaks down out of a small bear flag sending the stock under $40 and key support. Over the next year CROX fell all the way under $5 a share. The rise and fall of Crocs officially concludes.
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