Sabrient Select Opportunity Virtual Portfolio
September 28, 2010 – Harvest Partial Profits in long position FCX (1/3 position) and Close Partials in short position ATPG (1/2 position) for capital preservation
As I have discussed before, I am a proponent of "profit harvesting," in which you take partial trading profits in a position once it moves strongly in your direction. In general, for swing trades, I would look to bank some profits (e.g., 1/3 position) once a stock position has provided a 10% gain, and then again (e.g., another 1/3 position) when the balance of the position has reached a 20% gain.
Today we have an opportunity to book a first round of profits in long position ENDP on positive M&A news. The stock is up over 10% today alone, and at a price of $33.40, we are at nearly an 18% gain from the original entry price of $28.62. I want to lock in gains on 1/3 of the original position, and let the balance of the position ride in anticipation of even higher prices.
Also, yesterday short position ATPG popped well above my mental stop loss. On today’s early weakness, let’s take the opportunity to close 1/2 of the original position for capital preservation. I’m looking at a price now of $13.19.
Best Regards,
Scott Martindale
