http://www.youtube.com/watch?v=3Xa65U7WPKM
This utube video shows how to get out of a parabolic trade. I had mentioned some hints about silver going parabolic on forex thread booked profits and ran to hills even as the price chased the $50 mark. A number of stocks have also exhibited the same behaviour. Last year stanchart, scangroup & eagaads took the price. In 2008 Equity took the price & to date 300 i.e. 30/- is still a barrier. They wont touch those price levels for a while... If and when the highs are surpassed watch the volume. High volume on a steady uptrend or sideways move implies a new rally is coming. High volume on a parabolic move signals a selloff.
Note the opposite applies to a sell off. If the downtrend has been steady and a huge volume is injected the selloff is coming to an end. Safcom has this traits since February when NSE was strongly sold & the share has been sideways with 3.50 as the line in the sand. Watch the volumes towards announcement by end of May. High volume after announcement is bad news. Look at the safcom chart of May 2010. Almost a billion shares moved in 3 days after record profits and the price tanked. Record profits by banks and a number of their shares tanked. That is always a traders game.
Long term investors can use these signals to sell high & buy low while accumulating or exiting.
For forex traders watch the euro & aussie for sell offs to continue via the same script. The dollar is excessively oversold, I've not yet spotted huge volumes on the dollar index, but the bottom is near at this selling extremes back to the 2008 GFC lows. This warns of a sharp turn ahead killing the selling late comers.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!