Exit A Dull Trade Or Hang On? My Answer May Surprise You
Should I Stay Or Should I Go Now?
As The Clash once said, “If I go there will be trouble….An’ if I stay it will be double.”
Well, there certainly won’t be any trouble if you exit a trade early. And if you
do stay, true, you could sustain a loss but you’ll also miss out on a big
move should it ensue.
Let’s take a look at Intuitive Surgical
(
ISRG |
Quote |
Chart |
News |
PowerRating), first
mentioned on 09/08/04. Notice the stock has moved higher, but so far, really
hasn’t “set the world on fire.” The “old” me would have
quickly exited and looked for greener pastures. I’m now a little more
patient with stocks. Rather than trying to micro-manage the trade, I let the
market decide for me. If I get stopped out, so be it. Losses are part of this
game. However, should the stock take off, I remain positioned for the ride.
On Tuesday, the Nasdaq opened firmer but then drifted sideways on Fed watch. Then, after a few head fakes on the announcement, it rallied
nicely.
This action puts it at multi-month highs.
The S&P put in a somewhat similar performance.
Once again, it remains above its 50 and 200-day moving averages but
below minor resistance (circa 1130).
So what do we do? That’s not much new to say.
This market continues to look great. This is especially true when you study the
action in the individual sectors. As I’ve mentioned recently, there continues to
be a quiet sector rotation. One sector rallies while another has an
orderly pullback. Continue to focus on the long
side.
As far as setups, Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating), mentioned Monday
night, looks like it has the potential to rally out of a pattern I call a Trend Pivot Pullback.
The entry for this pattern is above Monday’s pivot high. Aggressive traders may
look to enter earlier.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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