Take a look at the orderly uptrend in Fluor since the beginning of this year. In January it traded at $75. Today it made a record close at $133.25. That's about a 77% gain - the kind of gain that makes you want to slap your Grandma. Luckily for my Grandma's, I bought 30 shares at $110 - a measly 21% gain.
But 21% isn't bad either. Am I being a pig? Is it time to take profits and move on? Or flip my shares (sell my shares now, then buy them back lower)?
After looking at the chart, I think perhaps I should sell. Here is my reasoning:
- The stock is running up against its uptrend roof.
- Today's candle looks like a shooting star, a bearish reversal candle.
- The stock is overextended - way above its 50-day, stochastics overbought.
- I am satisfied with my 21% gain in under a month.
I want to preserve my gain, but on the other hand, I don't want to miss out on a continued move to the upside. Therefore when I sell, I'll need to be looking for a good time to jump back in, after the stock has "digested" its recent gains and is ready to run again.
Take a look at this sweet chart:
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