re ,it is called the exception to the rule, which is YES, The Time to Panic is Now. An example would be what happens when you read a ZITL earnings report.
Absolutely true. Another way to phrase that is: When you realize that the reasons you bought the stock are no longer valid or you were flat wrong, SELL at the open, at market, NOW!
Example: APM. How many former APM bulls are out there? I did all the primary research, and bought APM at $34. By the time earnings came out, the stock had sunk to $27-28 area. They missed earnings expectations by 40%. At the same time WDC (major customer) was announcing an acceleration of the transition to the MR head technology, which APM was only beginning to ramp up. Very ominous, fundamental change in the outlook for APM. I put in my "sell at market" order before the market opened the next day after earnings were reported. I got $26 and change ($8/share loss), but never looked back, because I was no longer interested in APM on a fundamental basis.
Last I looked, APM was down around $10-11.
Here's a chart, going back 40 weeks. You can see where the stock was in the 34 range, where it traded for several weeks. Then you can see where it started down, going thru the $26 price where I sold. I could just as well have went short at the same time, and would have more than made up my $8 loss from the long trade:
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