Time to post on some of my recent sells.
On 10/31 the market was getting soft, IBD lowered exposure to 60-80%. I wanted to raise a little cash.
$MOD had been a good stock and this was my second time I had a position in it. If I had held the first time it would have been getting near a triple. Anyway. I had some nice early positions (before breakout) then I moved up to 5/6 of a position when officially broke out. This is what I want to do as much as possible. On 10/30, it plummeted below the 50dma and closed below. That was the proper sell signal I should have followed. I waited until the next day to hope for a bounce, but it was foolish and I sold a little lower. This was clearly a weak stock at that point and I sold it to reduce market exposure. I think a couple other related stocks like CARR, TT, and FIX had reported poorly and fell. As you can see from the chart, I would have been back to a nice positive position if I had held. We cannot know the future and must listen to the signals as they occur and in context of our other holdings and the market.
$UBER. When TSLA presented status on the RoboTaxi, it was a flop and UBER gapped up on the perception of reduced competition. I bought 1/2 position that gap-day and it closed above my buy price. But this was not an earnings gap and I was too optimistic. It fell a little and I added more. It fell a little more and I added more. Both those buys were when it was holding above the recent high of 78.45, so I thought that was ok. A day or so later, Uber was down 9% on earnings and fell below the 50dma. I was well below the IBD sell rule of 7-8% so I sold. I also wanted cash. This was a very bad trade for me, I lost 15.59% on about a 2/3 position. It has bounced around a bit since then but is still where I sold it.
Post Analysis: I addition to having too much confidence in a non-earnings gap up, I also added on the way down. I did not wait for more of a proof of strength, like breaking a downtrend or bouncing off the 21dma. Also, I was holding at a loss going into earnings, I just had faith in the company.
10/22/24: Sold $TDG because it had fallen below the 50dma on poor earnings by GE (both in aerospace replacement parts business). I also owned GE. TDG is a great company and a “serial compounder” and it deserves a place as a long term holding, but not in my IBD position account.
Post Analysis: My early buys allowed me to sell this at a slight profit even though it was below the 50dma. As of 11/10/24, it is still about at my sales price and the cash I put elsewhere has done very well.
10/22/24 $GE sold GE after it gapped down on earnings. My Sell Plan noted on the chart was to sell if below 21dma, which I did. Unfortunately on the same day it fell below the 50dma before I could sell it. Maybe if I were at home monitoring my charts at the open I would have gotten out will less loss. But I also do not want a trading system I have to monitor all day and ruin enjoyment of my retirement.
Post Analysis: I had no early buys, my first buy was at the buy point during the breakout. The day before was a little pop off the 50dma and my buy day was a strong move up to the buy zone. I later added more at the top of the buy zone. I only had 1/2 position. My mistake was to watch it slowly move up to top of buy zone before I added more. Too timid. But did that save me? I would have had more money in it, but at a lower price.
Overall Returns: Most of the year I have been trailing the S&P by 1-2%, and if you are looking at this post, you would think they system does not work well. But as you will see from my next post of recent buys, things are going very well since the election. I am up 32.5% for the year and the Naz is up 28.5% and the S&P up 25.7% so at the moment, I am having a good year and this the type of market where IBD trading outperforms. It should also outperform in a crash where the rules get you out.