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Non-Tech : Dorsey Wright & Associates. Point and Figure
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To: Richard Ruscio who wrote (2159)12/1/1999 2:40:00 AM
From: Ms. X  Read Replies (1) of 9427
 
If you are trading the stocks it isn't a bad idea to take a portion off the table. There is nothing wrong with taking profits. You can either take the original investment off and leave the rest as gravy or, take 1/3 at a time. Either works fine.

I really don't like selling a whole position with the thought of "buying back" on a dip. This is a personal thing. Usually when I sell a position I move on to something else. I will buy partials of a stock and then add to on a dip but rarely do I try and time the dips by selling and then buying back. When you start to add up the taxes and the transaction fees it, most of the time, makes little sense.

If your stocks are on a high pole and you have nice profits a good thing to do is take a third off on the three box reversal down from the high pole.

If the RS reverses to O's you certainly would consider lightening the position and the same if the trend turned negative or consecutive sell signals.

There are many ways to do this and it depends on your style of investing. It sounds to me that you would like to take some of the profits as you go. This is fine. As long as the stock looks strong fundamentally and technically there is no reason you can't hold part of the position longer term.

You may also consider sector rotation. As a sector that your stock is in turns negative lighten up on the position and move into a sector that is lower and moving up.

Did that answer your question?
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