The first reason I decided to sell this morning was the lack of momentum. I’ve held this for about a month, and it’s gone nowhere in that time. The setup still looks promising, but perhaps I was very early. It had a chance to BO when I bought it, but it never did get any follow through volume or price action, Also, its RS within the Technology sector has been trending down in a sector that already underperforms the SPX. With the lack of follow through and declining RS, I probably should have sold last week when I had a small profit.
The second reason I sold is because I want to add a new buying rule. I want to focus more on trades that will give me the best chance at achieving my 3R goal. Just breaking out of a base isn’t good enough. I like to use a channel that defines the boundaries of the Stage 2 ascent. From now on I will only take trades that have, at least, a 3R cushion between my buy point and the channel resistance. After adding this rule and re-evaluating this trade, even if this did BO it didn’t have enough room to make 3R gains. Therefore, I sold and am in all cash at the moment.