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My sell order for China Minzhong at $1.01 was filled today. I retained some 50% of my investment in the company in case resistance should break which would send share price higher.
There is always a chance of a retracement in share price to supports. So, locking in some gains at resistance frees up resources for me to take advantage of any such retracement if it should happen.
Whether share price should rise or fall, I have a plan in place and could potentially benefit either way.
With 99c resistance broken, the declining 100w MA which approximates $1.03 is the immediate resistance to watch. Being a long term MA, the 100w MA is likely to be a tough nut to crack in the shorter term.
If I were to hazard a guess, I would say the 100w MA could force share price lower. In such an instance, share price could decline to as low as 80c which is where we find a flattening 50w MA. 80c is some 20% lower than where we are now.
However, in the event that resistance provided by the 100w MA is broken, Mr. Market is likely to become quite euphoric and we could see the gap formed in September 2011 covered at $1.20 eventually in such a case.
Since risk and reward analysis gives me a 50/50 chance either way, divesting 50% of my investment seems like a logical thing to do.
Related post:
China Minzhong: Share price to go higher.
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5 comments:
I sold off a bit at 1.015 but this morning it seem to be going to climb even higher... seller's remorse.. :D
Hi Ray,
You got a better price than I did. Congratulations. ;)
i heard this from a friend. the best stocks to short are those that have run up sharply.
cmz certainly had run up and in this case, i guess taking profit is not a bad idea at this level.
congrat AK71 & Ray!
Hi seefei,
Thanks. :)
Prices which have run up too quickly form parabolas. Parabolic price action is usually unsustainable.
Having said this, CMZ's price action isn't exactly parabolic yet.
Thanks Seefei....I tried to comfort myself that taking profit is never wrong :)
Judging from the candlesticks, seems like the price may yet fall from here.... lots of indecision from the two camps now.
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