As shown on the chart, here was what happened
I bought
ADBE
on February 5, right near the resistance, expecting a break out into new high.
The stock did not break out and started to go down.
I sold 50% of my position on February 16 as it crossed down the MA-150 on huge volume. Actually I should have started selling on February 15 as it crossed down its MA-150 on higher volume. I was a little reluctant back then because the overall market was still very good and I hoped the stock will soon recover.
At its MA-200, the stock started to move up again. On March 1 it crossed up MA-150 but could not go further, instead moved down again the next day. That was when I sold the rest of my position.
Had it not recoverd from the MA-200 on February 21 and moved down below it, I would also sell the rest of my position.
Similar to
AAPL
(see the idea in the related idea section), this stock was a laggard during the uptrend from January 24.
Lesson learned:
I bought
ADBE
on February 5, right near the resistance, expecting a break out into new high. The stock did not break out and started to go down.
I sold 50% of my position on February 16 as it crossed down the MA-150 on huge volume. Actually I should have started selling on February 15 as it crossed down its MA-150 on higher volume. I was a little reluctant back then because the overall market was still very good and I hoped the stock will soon recover.
At its MA-200, the stock started to move up again. On March 1 it crossed up MA-150 but could not go further, instead moved down again the next day. That was when I sold the rest of my position.
Had it not recoverd from the MA-200 on February 21 and moved down below it, I would also sell the rest of my position.
Similar to
AAPL
(see the idea in the related idea section), this stock was a laggard during the uptrend from January 24. Lesson learned:
- When the overall market is in uptrend, you should put your money into the strongest stocks.
- If a stock is moving down its MA-50/150/200 during an overall market uptrend while other stocks are moving up, just sell it. You can always buy it later.
- Weak stocks during uptrend will become even weaker during correction.
- Strongest stocks during uptrend can struggle to move up during correction, but generally they will decline less than weak stocks during the same correction.
