In a recent post "Forecasting the Future: Chart Reading", I mentioned that the chart of DHB Industries (DHB) may have been forecasting some good news.  High volume gap ups in a chart with no news can often indicate some positive announcements in the near future.  That’s what was seen in the chart of DHB.. later, the big Army contract was announced sending the stock to the moon.. at least for one day.  Almost immediately the stock reversed on heavy volume and currently sits below support of its 50 day moving average.  It’s the kind of chart action that defies logic and something I don’t think I have ever seen.  Much of the damage done in this stock has to be tied to the large insider selling of the CEO, CFO and other insiders.  Imagine you’re the CEO of a company who has just received yet another large $100 million order from the Army bringing your order backlog to over $500 million.  The 4 million shares sold by the CEO on November 29th is one thing.  It’s highly possible that David Brooks was in fact unaware of the contract announcement.  Not to mention that insiders sell for many reasons.  The red flag was the big sale of 5.31 million shares on December 29th after the announcement was made… and he’s not done yet.  Many smaller sales continue to be made by the CEO Brooks as well as other company insiders.  This kind of selling raises eyebrows and should be a signal to you to stay away!  Just as the charts can forecast the future, so can insider transactions.  I would not be surprised to see some negative news announced soon.  Stay tuned!