Bouncing Off Bollinger Bands (MTXX)
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How are your money management skills these days? Here's a real test for you:
Over the past 10 months, MTXX has been bouncing up and down between roughly 14 and 19. One of the first signals that the stock is about to start moving higher again has been when it penetrates its lower Bollinger Band (blue arrows). While extremely risky by themselves, those signals have often been confirmed by MACD Histogram crossovers within a couple of days (red arrows).
By practicing good money management skills (tight stops, well defined exits, etc.), agile traders may be able to take advantage of MTXX's recent history now that it has gone and done it again (green arrow). The rest of us can watch with interest to see if history will repeat.
