At least for me.
I have been trying put a chart of Suncor Energy (SU) to no avail. I own the stock personally at $60. It is at $82 now, so woo-hoo right?
Well yes but my purchase was in September of last year right before it went down to $50 (actually a little lower). I do not own this stock for clients, they own a much less volatile oil sand name.
The point here is about when to exit and when not to. I certainly could have found a much better entry point but I buy into the oil sand theme enough that I did not want to sell, even down 15%. Putting a stop order 8% under the purchase price of every stock you own has never made sense to me (I have written about this before) and this is an example of the point.
As for buying it here I have no feel for whether $82 is a good entry point or a bad one. If blogger comes back I'll add the chart to this post.
5 comments:
On this weekly chart, at least, RSI, MACD and volume are all exhibiting negative divergence, suggesting that momentum and enthusiasm are waning badly, and that a consolidation period or a significant decline may be in the cards.
Energy stocks tend to crater like clockwork April-May and October. You'd think something that predictable wouldn't keep working. So a decent entry might be coming up.
Anyway, my fav stock. That and BHP.
Roger,
When would you throw the towel in on a trade? If you still believe in your premise, would you average down to decrease your cost basis? I struggle with this question, since I am a relatively new investor and have been VERY wrong at times.
Thanks,
Lisa
Roger,
I am one of those crazy investors who puts an 8% stop under every single equity purchase I make.
It has been working for me.
I also believe that when one of your stocks in your portfolio hits that 8% stop, you should literally "sit on your hands" and avoid reinvesting those funds until you have a signal that the market itself is healthy. I use my own portfolio for those buy signals, waiting for a partial sale of one of my holdings at a gain or on "good news" to add a new position.
This avoids the frequent problem of compounding one's losses in a declining market.
Bob
I think $82 is a horrible entry point. All you had to do was follow the technical indicators on the sector and choose a reliable entry signal for this stock among many. Oil has been following a pretty persistent pattern just as another commenter posted. Right now SU is pretty close to top channel. Could it go higher? Sure but the greater probability is that it comes off soon along with the rest of the oil complex and sets up a better buy. I would look for it somewhere at the trendline bottom around 73 or so IF THE ECONOMY STILL LOOKS OKAY.
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