Get Rid of Laggards...
The market is constantly changing. Thus, whenever the market is ready to resume or make a new move higher, more often than not, a new pack of leading stocks emerge. You may find several stocks in your portfolio under performing or lagging behind the market. If this is the case, it is usually best to sell/cut loose these poor performing stocks and replace them with new, better performing stocks. The goal is not to trail or match the indexes. The goal is to beat them. If you are only concerned with matching them, then just buy some market ETF's and call it a day. If you are attempting to outperform the market, then you have to buy the top performing stocks that emerge from the markets positive action.
Example: Nasdaq (+0.81%) v.s. DDRX (+13.6%). While DDRX can pose as a riskier trade, the reward is obviously larger. A stock like DDRX has a chance to continue a strong move. Tomorrow, the market may post a 0.56% gain, while DDRX might edge up another 5-6%. In the end, you might make 1% or so on the NASDAQ, but you may be able to pull a 3% or higher move on the stock.
posted by Nick M. @ 11:31 AM
9 Comments:
CMFO on the radar..in at 5.49
Some China-related stocks still showing strength. Such as CAAS, CMFO, CRIC,CRTP,FMCN, GRO WATG, etc.
Coffee also strong as well...DDRX, GMCR
other china names
ASIA, CFSG
I traded ACLS for CMFO.
Teaching myself a lesson in not taking profits! F%*king crap... lol. I net 23% with ACLS and it would have been 60 to 70% had I been a good boy.
I'm selling the rest of my ACLS if it closes near the LOD. Selling our stocks at the right moment is the hardest aspect of trading. I am realizing that the best indicator in selling is to see how over extended a stock is from its 10 day MA. ACLS was grossly over extended from its 10 day once it hit 1.60-1.75 which was a signal to sell. Do not beat yourself up over it, just be happy that you made a profit and concentrate on the next trade....
Looks like HPJ is trying to shake out as many traders as possible. I would only worry if it closes by the LOD. Anything over 4 is just fine. With huge growth projections predicted for China, most China-related stocks should do well in the immediate future.
I was whipsawed out HPJ earlier today, wanted to lock in the 30% gains, gun-shy ;) I jumped back in a couple of minutes ago. Took a position in HWD and CMFO today also.
Can't blame you on selling HPJ for a profit. Had I known that it was going to close below 4, I would have sold everything at 4.70
In any case, it may still bounce from here. Thankfully, I added several new positions today. I will go into them on more detail later on tonight. I also bought CMFO and HWD, along with several other ones, including ALN. A lot of China related stocks on my radar...I'll post more later, got class in a bit...
We'll see about HPJ. Down on lower volume. It still hasen't broken its short-term trend, though. Have fun in class. I'm working on my assignments too...just letting your blog, and today's charts, distract me from FIFO and LIFO cost flow assumptions!
Take care,
Chad.
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