Protecting Profits
While I remain bullish on the high RS
breakout stocks, as I’ve suggested earlier, the market is definitely making me
edgy enough to want to take profits. Even within ongoing intermediate-term
rallies, you can encounter pullbacks that evaporate paper profits.
The action of individual stocks serves
as my warning systems. The action in Serologicals
(
SERO |
Quote |
Chart |
News |
PowerRating), Krispy Kreme
(
KREM |
Quote |
Chart |
News |
PowerRating)
and Columbia Sportswear
(
COLM |
Quote |
Chart |
News |
PowerRating), all fine companies, should put the I-T
trader on notice. Watch your trailing stops, and look for opportunities to take
full or partial profits.
Remember that all stocks are
speculative and risky. On any trade, reduce your risk by limiting your position size to a percentage of your total
account and setting inviolable price stops. For an intro to combining stops with
position sizing, check out my lesson, Risky Business.