What To Do When A Stock Moves In Your Favor

Smoke ’em If You Got ’em

CIT Group
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, mentioned recently as a First Thrust short, has sold off hard as of late (a). When blessed with such a nice, quick move, make sure you lock in partial profits and trail your stop lower on your remaining shares.


If you’re new to momentum based swing trading and would like more information on the basics such as trend, entries, and money management, email me and I’ll be happy to send you the primer section from my second book.

On Thursday, the Nasdaq gapped lower but soon found its morning low and began to rally. However, it found its high by mid-day and began to slide again. It bounced once more in late-afternoon trading but then sold off hard going into the close. This action puts it at multi-month lows and at new lows for the calendar year. It also keeps it below its 50-day moving average.


The S&P also sold off hard. It too is at multi-month lows/new lows for the calendar year. It also remains below its 50-day moving average.


So what do we do? I think the charts speak for themselves (read my 1/10/05 column for more on this). Therefore, I still see no reason to buy this market. However, since we are oversold (again), manage existing positions (trail stops lower/take profits—see above) vs. initiating new ones.

No setups tonight.

Best of luck with your trading on Friday!

Dave Landry


P.S. Reminder: Protective stops on every trade!

P.P.S. Learn my newest and most advanced version of my Bow Ties Strategy. Click here for details.