By reading this, you’ll uncover an example that shows how actively buying stocks under market accumulation reduces risk. This approach safeguards our and our family’s hard-earned money from quick losses.
The Prelude to a Stock-Picking Symphony
Imagine if you will, a world where picking stocks was as simple as choosing your next Netflix series. Unfortunately, the stock market is more akin to selecting a meal in a foreign country without knowing the language. It’s a mix of excitement, anticipation, and a dash of “what am I doing?” This is the backdrop against which I refined my approach to investing.
The Strategy Unfolded
Act 1: The Reconnaissance
- The Discovery: ELF caught my eye like the last slice of pizza at a party. It was priced at a mouth-watering $208.13, but I wasn’t about to lunge for it without assessing the room.
Act 2: The Deliberation
- The Checklist: Armed with a metaphorical magnifying glass, I scoured through the details:
- A bullish market? Check.
- A robust RS Rating? A solid 97 – practically an honor student in the school of stocks.
- Institutional interest? As evident as coffee’s allure on a Monday morning.
The Adventure Begins
The Leap
- Making the Call: Despite ELF being a bit on the pricier side, akin to a designer brand during a retail therapy session, I went for it, hoping the 8-week holding rule was the fitting room I needed.
The Unexpected Plot Twist
- Surprise!: As soon as I started to break in my new investment shoes, ELF decided to take a walk down under $200, reminding me of the unpredictability of high fashion – fabulous one moment, faux pas the next.
Unveiling the Truth
As in life and love, the stock market holds its fair share of mysteries and lessons, each more enlightening than the last.
Enlightenment and Facepalms
- A Humble Pie Serving: Adhering to the 8-week rule felt right until ELF’s price played hopscotch below my comfort zone. A clear reminder that sometimes, sitting on your hands is the most action you can take.
Philosophical Musings
- A Lightbulb Moment: I realized that leaping back into volatile waters without checking the lifebuoy (the U/D ratio) is akin to skydiving without checking your parachute. Thrilling, but not recommended.
The Scorecard
The Reality Check
- ROI: Let’s just say, with a -5.58% return, the market handed me a lemon. And while I haven’t made lemonade yet, I’m stocked up on recipes.
- Reflections: The whirlwind lasted 3 trading days and felt more like a miniseries than a full-blown saga, leaving behind wisdom and a twinge of humility.
details at a glance
Opening
- Underlying: ELF
- Date (Entry): 6 Mar 2024
- Underlying Price: 208.13
- Stop Loss: 199.39
- Profit Target: 249.76
- Market Outlook: Confirmed uptrend
- RS Rating: 97
- RS Line Trend: Upward (U)
- Industry Rank: 97 out of 197
- Volume U/D Ratio: 0.9
- Institutional Ownership Trend: Upward (U)
- Position Risk, %: 4.18
- Position Risk to NL, %: 0.40
- Potential Profit (Position), %: 19.90
- Risk to Reward Ratio: 0.21
- Position Size, %: 9.53
- Reason for Opening Trade: Bought the stock back because it had recovered and there is an 8-week holding rule. However, the Up/Down ratio and Industry Rank don’t align.
- Was It an Ideal Buy?: No. The price was extended.
- Remarks: Let’s see what the price will do. The stock was extended and had a not-so-good U/D ratio.
Closing
- Date (Exit): 11 Mar 2024
- Price (Close): 198.46
- Market Outlook (Exit): Confirmed uptrend
- RS Rating (Exit): 97
- RS Change: 0
- Exit Remarks: Price fell below 200. Stopped out.
Results
- What Went Well?: Attempted to adhere to the 8-week holding rule by buying the stock back.
- Cause of Error/Improvement: When bought back, I wasn’t aware that the U/D ratio was below 1. Need to pay more attention to recent price action before buying. The stock had become volatile with significant bounces over two days, indicating it was not a good time to buy.
- Position ROI, %: -5.58
- Position ROI (Portfolio), %: -0.53
- Position Open Time (Trading Days): 3
- Position Open Time (Days): 5
The Encore: A Steadier Beat
In hindsight, embracing the steady rhythm of less volatile stocks is akin to choosing a reliable daily driver over a flashy sports car. Sure, the latter might turn heads, but the former gets you to your destination without the drama.
The Parting Note
The art of investing, much like a well-composed symphony, requires patience, timing, and the occasional fortissimo moment of bold action. Yet, sometimes, the most profound music is found in the rest notes – the moments of silence and anticipation.
In the end, safeguarding our financial future might mean choosing the path less traveled by speculation and more by careful consideration. It’s a journey filled with learning curves that resemble roller coasters and a destination worth the ride. And if nothing else, it provides ample material for dinner party anecdotes, where tales of investment escapades – both triumphant and turbulent – are shared over glasses of wine, each story a reminder of the adventure that is the stock market.
