A great time to explain how I managed this & why as I was planning more comments on this stock from a few perspectives...first of all here are my entries for this name as I've been trading around a position for a few months and talking about how this was the clear liquid leader..
Buys are below, sells on top. So our view was that this was going to be king of AI etc, follow @Beth_Kindig or others smarter than me for more of the fundies/narrative. So we bought some on a pb buy and sold some, then bought it back etc and lightened up yesterday & today...
as well. Now it's down to the size that I can stomach a pullback to the 50day, now I switch to a 50-day trail (which I've been using for awhile) or meaningful close below the 10wk but had to trim to the extent I'm comfortable as the pullback in P+L could be huge at this point...
The real tradeoff for me or temptation is to feel disappointed as I 'didn't have on a HUGE line' to really move the needle and THIS is the trap for many, and for my thinking at times. NO ONE ever feels like they have enough on of a great trade when it's working...
And here is how pro's think imo. The stock was extended and at a multiple of my risk BEFORE an insane gap. Now I could have rolled the dice but given that I've been in a period where wins have been hard to come by and I need to keep my equity line at least sideways...
Taking additional risk on headlines is NOT the way to manage things. Furthermore my position was/is smaller precisely because things haven't been working consistently and you have to trade smaller in those environments otherwise you are subject to drawdowns that will erode...
too much capital & confidence. So I have a smaller position in a stock that has nearly doubled since I bought it as @markminervini would say 'I'd much prefer a small position in a stock that could double than a huge position in a stock going no where.'
The other key here is to ask WHY this stock is ripping and here is where the 'value camp' with all due respect gets it ALL WRONG!! They focus on P/E and a bunch of meaningless stuff but the reality is when a growth stock is truly in its 'earnings/growth cycle'...
The institutions will steam roll everyone. This is NOT a short squeeze as the stock was barely shorted and twitter is full of value people swearing and screaming overvaluation while getting carried out of this trade. If you want to short these type of names be my guest...
but you should study history and wait for a big volume break on the weekly first, as that is at least a sign that the institutions are unloading shares because if they aren't selling none of your value thesis matters. Look at ANY broken growth names I highlighted in 2022...
You will see that I was highlighting when they were breaking on ENORMOUS volume, that is the time to short or look for short opportunities. This stock is in the strongest part of it's technical & fundamental trend and anyone who has stepped in front has been completely crushed..
Last part is if there is a silver lining for anyone who didn't own it would be that markets need new leadership. This is what institutions that under own stock will do to MANY names if or when a bull gets going in earnest. Here's to hoping this isn't a one off and vs a tip off.
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