Being a successful investor means being WRONG a lot of the time. It is not uncommon for well more than half of your trades to be losers, but the key is being able to concede defeat and cut losers quickly. It preserves not only physical capital, but sometimes more importantly mental as well. Let us take a look at two examples from our Monday 7/16 Game Plan. Below is precisely how they were written.
Stocks to be considered shorting opportunities are SCI. SCI is a play on the funeral play and the stock is higher by 29% YTD and 40% over last one year period and sports a dividend yield of 1.4%. To its credit the stock has traded very tight and that was best displayed with a 5 week period between weeks ending 3/20-4/17 which all CLOSED within just .18 of each other. This week SCIhas begun to trade a bit looser and it recorded a bearish shooting star candle on 6/22 at 16 year highs and at the round 30 handle. The stock is down 3 of the last 4 weeks and this week was the first back to back lower weeks of 2015. It is approaching its 50 day SMA and lets look to short below that line at 28.65.