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.
Navigation:
- Example 16: Crocs (CROX) <–- Currently Viewing
- Example 15: 9 Lessons to Learn Regardless of a General Motors Bankruptcy
- Example 14: Identifying 8 Key Points on Google’s Stock Chart
- Example 13: 7 Great Lessons to Learn From Apple in the Last Year
- Example 12: A Technical Look at the Washington Mutual Brankruptcy
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CROX - arrghghgh. Stick a knife in my eye why don't you?!?
I got caught on that after hours earnings crush @ #7 - worse loss of my trading career. I know a lot of really succesfull traders who rode that out with me as we all looked for the door at the same time.
I remember the sell off at 5 minutes after 4PM and thinking to myself, "oh my god, this isn't a closing adjustment - SELL SELL SELL." I couldn't get my orders filled fast enough to get out. It was a horrible event.
Here's something interesting for you guys to note: The Nasdaq topped out and made its bull market hi on 10/31/07. It started to break down on 11/07 - CROX made its bull run hi on 10/31 as well, reported a/h and opened 20 + points lower the next day - it topped with the market and to my knowledge was the first leader to signal the death of the bull market. Nearly 1 year ago from today.
On point 7 that was earnings based and one thing to remember is to always keep track of when they are being announced. The day before the announcement any investor could have easily sold 50% or something similar to lower overall risk heading into the call.
Another idea would be to watch it live after hours and sell out as early as possible if the stock started tanking. Just something to think about.
Another great chart Blain, by the time you are done with this area of the site I bet I won't go anywhere else for stock chart education!
You can have technical indicators until the cows come home, but this stock is pure fad. Plus, their shoes are just plain fugly.
Blain,
Now if I could only collect all these charts and transport myself back to October, 2007