Good morning traders
A stock that's fallen a third in eight months usually has a good reason. So before I call anything cheap, I check one line on the weekly chart: the 200-week average. On Martin Marietta it's up 23% in two years.
š§± Who's selling, and why
Martin Marietta digs the crushed stone, sand and gravel that roads and buildings are made of. It peaked at $710.97 in February and closed Tuesday at $472.40.
The reason is in its own second-quarter release, filed with the SEC on 30 July. Revenue hit a record $1.95 billion, up 21%. Earnings from operations fell 10% to $372 million. The companies it's bought added a lot of tonnes and cost it margin, and the stock fell 5.2% on the day.
Record sales, lower profit, and the stock paid for it.
That's a margin problem. Margin problems take a few quarters to fix, and they push good businesses under their long averages while they do.
š Cheap or broken? Three checks
The price dropped under a long trend that's flattened but is still intact.
Three checks before a falling stock goes on the list.
ā Is the long trend still up? The 200-week average is at about $520, up 23% in two years. It's gone flat since late August, so that's the one to keep watching.
ā Is the medium trend still above it? Yes. The 50-week average is still over the 200-week, so the uptrend hasn't flipped.
ā Has the selling washed out? Weekly DeMarker, a 0 to 1 gauge of how stretched the selling is, reads 0.15. Under 0.30 is oversold.
Three yeses, and price is about 9% under the 200-week. That's the zone a slow buyer waits for.
āļø One entry or two
That last check decides how you buy.
Same money at risk, two different ways in.
On 9 September I looked at Home Depot in the same kind of zone, and its momentum was still mid-range. So the plan was half at the zone, half lower, with one stop under both. It closed that day at $310.45 and traded down to $277.15 on 1 October, another 10.7%. That second leg is exactly what a split entry is for.
Martin Marietta's momentum has already washed out, so one entry is the standard play. Either way, it's the same money at risk. Splitting only changes where the fills land.
The next report lands in early November. Anyone buying before it holds through it, so size it to survive a gap.
ā±ļø One thing worth doing today
If long-term buys are new to you, the free investing quiz checks how you pick, size and hold them, and emails you a Leak Report at the end.
š¬ The full version
The Gate Board on Substack has where all three of my gates sit before today's CPI, and which of Sunday's trades filled ahead of it.
š Next issue
Friday's the week's closes at the New York close, and one company taken apart.
The RB Trading Journal is 20% off for readers of this letter with this link.
Education, not financial advice or a recommendation. Martin Marietta figures are from its second-quarter release of 30 July 2026, prices and averages from Yahoo Finance. Past performance doesn't guarantee future results.