[Tom]

An update on what happened: I sold MSO because it was forming a Head and Shoulder Top since the two shoulders form a trendline and the volume occurred on right shoulder wasn't heaviest. But It didn't fall after forming of the right shoulder. I am still scratching my head and trying to learn from this...

As I said previously MSO moved into Stage 3A at the end of April, which the definition is "Stage 3A - Looks as if a top is starting to form. Be sure to protect holdings with a close stop." and hence is not a time to be initiating a new position or adding to already open position, as you should only be buying when in Stage 2 if you are following the methods rules.

I'm not sure about the head and shoulders pattern you were seeing, as the last time we spoke about it, it only had a left shoulder and potential head, as it was testing the previous swing low, which it only breached by a tiny amount and so the stop loss you had should have held and hence the method would still have kept you in it to this day.

The stop loss would still be in the same position, and you would be watching it closely for signs of weakness as the broad market continues to develop in Late Stage 2 / Early Stage 3.

Argh! You are right that it was not a head and shoulders top pattern. I read the chart wrong!

Now that lesson goes into my trading journal. thank you.

---

I would like to have someone exam my trading method, please.

I am holding MPET from Nasdaq. It has a two year stage 1 base and I purchased it when it broke out in Feb. Sold half of position during the peak time - my reason is that the support range was around 2.5 - 2.27 from Jan, 2011.

For the other half of the position, I have sell-stop around 1.7 since it has a valid trendline. Since Mid May, MPET has been in correction and is forming support around 1.9. I plan to keep trailing it with my sell-stop.

Does it sound alright? Did I miss anything?

I can't see anything wrong in that approach with regards to the method as you have you sell stop in place and the correction has been on declining volume so far. So hopefully it will hold up for you and rebound higher again. Good luck.

Thanks for reviewing my method.

I noticed that the trend line from your weekly chart is sharper than the stockchart weekly chart. Your weekly trendline could reach $2 but stockchart is around $1.7. Does it make difference?