Laggards Need Not Apply
April 5th, 2007 by Buck Woodford
It’s been a listless few days for the stock market as we approach the 3-day weekend (markets closed for Good Friday).
Digging through the universe of stocks, we’ve come up with a few potential winners. But the environment isn’t right to give them a lot of room to the downside. Profit-taking wise, I’m of the mentality to trim at least part of my positions on small 4-6% pops. Loss-avoidance wise, I’m definitely looking for the exit door at the first sign of losing upside momentum.
For example: iGate (IGTE), shown below, offered a high probability long trade but didn’t end up delivering. It couldn’t hold the 8.25 level even after giving it 2 days to come back. Thinly traded stocks like this one are tough to sell at “decent” prices once they start falling, so we calmly exited our small position at 8.14 on Tuesday afternoon.
With so many quality fish in the sea, laggards have no place in ManyPeaks client portfolios.
