Contrarian

Twitter has become absolutely ubiquitous in our society.  Who has not heard of Twitter?

The stock has performed horribly.

You can research the how and why yourself.

Here is one analyst’s opinion:

Twitter is ‘toast’ and the stock is not even worth $10: Analyst

 

If you are a contrarian, which may or may not be a wise thing, TWTR may be a good risk/reward stock to experiment with, if you can exercise good risk management.

Start with a small position, have a clear and inviolable stop loss level, and only add to your position once you are in the green.

If you are not ready to trade in this manner, try and paper trade this stock to develop your technique.

In general, never buy a stock that is downtrending like TWTR.  Stay with the trend, and do not think you can pick bottoms or call tops.  Many a failed investor has made that mistake.

 

 

 

 

 

 

 

Sell some Hold some

This has been a rewarding rally in many stocks since Mr. Trump won the election.

What does one do now?

You will hear experts say that you should never sell profitable positions going into the end of the tax year, because then you incur a tax liability.

Others say to ignore the tax consideration if you have a good technical or fundamental reason to take profits.

Personally, I took profits on some positions that have had a great run and are seemingly ready to either rest or pull back.  Those positions are at risk for either a technical pullback, or for a profit harvesting pullback after the new year.  I may be wrong to be taking profits now, but I have both a technical and fundamental reason to do so.  I will get back into many of those positions when the opportunity arises.

There is no reason to call the top of the market here.  The trend is strongly upward.

 

 

Trendlines Help

If you have been adding to your long positions and feeling nervous as they climb, you are in good shape. Hold.

What do you do if you have missed this move, or if you have more cash to deploy?

Trendlines help frame your buy, hold, and sell decisions.

Look at the below 3 charts.  The monthly chart of the SPY shows a continued uptrend.

The weekly view shows an almost 2 year battle between buyers and sellers has resolved to the upside as the SPY makes new highs.

On the daily chart,  if you draw trendlines containing the price action, it seems prudent to wait for a pullback to deploy more cash.