Tytan Holdings Inc (TYTN)

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You have to realize that the markets always go up and down. The shrewd investor, will look to take profits when they present themselves at a time when the market appears to be temporarily over priced. Then after the market makes a price correction by retracing itself for a time, he will buy back in and accumulate more shares when the market finds support and continues it climb higher.

Many years ago a man named Ralph Nelson Elliot studied stock market movement intensely and his research showed that the markets seem to move in a pattern of 5 waves up and three waves down when the market is trending higher and then in 5 waves down and three waves up when trending lower. He published his theory of stock market movement and it became known as the Elliot Wave Principle. The tricky thing is, how do you know when the market has reached a point where the majority of investors feel that the current price is overbought or oversold (the end of the wave) and are taking profits or buying more. That is why technical analysis was created by not just one but many different investors over many years.

John Murphy compiled a collection of all the most widely used and successful technical indicators and chart patterns that the most successful traders have used over the years in a book titled Technical Analysis of the Financial Markets. John's book has become like a Bible for serious investors who want to optimize there trading ability to increase their profits. A man named Robert Prector continued and perfected the work of Ralph Elliot and is today considered to be the modern day expert on Elliot Wave Theory.

So, if you would like to know more about Technical Analysis, I would recommend that you studied both Robert Prector's http://www.amazon.com/Elliott-Wave-Principle-Market-Behavior/dp/0932750753/ref=sr_1_1?s=books&ie=UTF8&qid=1309004687&sr=1-1 and John Murphy's books. http://www.amazon.com/Technical-Analysis-Financial-Markets-Comprehensive/dp/0735200661/ref=sr_1_1?s=books&ie=UTF8&qid=1309004531&sr=1-1 As you do, look at the DOW Jones Industrial average and the S&P 500 Index today, and you will be able to see many of the chart patters and market waves discussed in those books reflected in today's price movements. Individual stocks behave pretty much the same way as the major indices.

But, even with today's precise computer technology it can be difficult to accurately predict when a price is overbought or oversold. So, I have adopted a strategy where I will take a position in a stock at a place where believe (based upon my studies of technical analysis) that it appears to be an optimum time to purchase that specific stock. Ideally, I like to find a place where the Weekly and Monthly charts are both giving oversold readings. That typically occurs at the completion of major market bottom in the stock. I believe we just saw a major market bottom on the TYTN chart at the end of March 2011. Today, as I've pointed out in my posts, the market is in the process of making a price correction because the majority of traders have for whatever reason determined that the price of TYTN has moved up a little too fast and too high.

So, as I said before, had I taken a position in this stock back in March (I was not watching it then) I would have taken profits on May 26th which turned out to be a Key Reversal day for this stock. At that time, there was a divergent sell signal between the Stochastics indicator and the Price movement of the stock. You can see that same divergence in many of the other indicators as well. When I'm uncertain about the condition of the market and have no clear signals, I will often just sell off half of my position when the market seems to be topping out. I might have done that on May 17th during a day when the price was falling after making new highs and leaving a gap between the high price on Friday and the Low price on Monday. Gaps usually get filled. I also might have bought those shares back when the price fell to that gap. I would have only traded out 1/2 of my shares at that time because, if I had been wrong (having not clear sell signal at the time) and the price continued higher, I would have at least been half right. On the 26th however, with a sell signal in place, I most likely would have sold it all. Selling half however would have still been a good strategy for anyone who believed in the longevity of the price to continue moving higher over time. Then when the market finds support somewhere in the coming weeks or months you could purchase more shares at that time and increase your position. In this way, you are still holding the stock for the long term but, you are capturing profits along they way which you could then chose to reinvest when the time is right.

TYTN does appear to be a solid company and I believe the price will find support somewhere and eventually move higher than its recent highs. What we have witnessed here in the previous rally appears to be the first wave up according to Elliot Wave Theory. Typically there will be one wave down, then another up (not as high as the previous high) and then a third wave down to a lower low than the first wave down before the market support and starts it's next wave up. But, since I'm not an Elliot Wave expert by any means, I trade the technical indicators and chart patterns that I know well. So, I usually won't know the bottom of this price drop until it slaps me in the face so to speak. Anyway, those two books will help you understand market movement and give you more confidence in knowing when is a good time to take profits. Good Luck to you!