Making a disciplined sell. And ask me to analyze any stock during today’s chat…
Another day, another donut, right? The markets are up slightly, with the Nasdaq leading the way up almost 3/4%. How many times have I written “Sandisk is up nicely” in the last week, even as the markets have been trading within a handful of percentage points of their lows? A lot. I had been a buyer of Sandisk several times while it was under $40 a share (though I didn’t nail the bottom and as I always remind you guys, nailing the bottom isn’t the point anyway). Throughout mid-August, we had been steady buyers of more Sandisk calls and now that they’ve kicked in as the stock has run back higher, it’s become our biggest position. Remember these, for example:
- Heading into the close, I’ve done a few more trades…
- I’m buying some out of the money calls…
- I’ve stepped up and done some buying despite the emotions taking over out there…
Now, the hard part becomes when to sell? Sandisk is clearly blowing away the broader markets in the last couple weeks but that doesn’t mean we just blindly take profits. Discipline does indeed dictate trimming some now — this is our biggest position as I’ve been noting and when your biggest position includes as many call options as ours does and it rallies 30% in two weeks you probably need to trim it down just a bit. But “baby steps” are fine for now. I’m selling about 10-15% of my Sandisk call options this morning. I’m selling the nearest-expiration dates, including October calls with strikes in the low $40s which are up big now.
Other than that, easy does it again. Let the positions work for us.
Also, I’m doing a special “Stock questions only” chat with you guys today at 2pm EST at http://tradingwithcody.chat. You can get a free one week trial signing up here if you’d like to ask me to analyze a specific stock for you today. I’ll give each stock I analyze a Revolution Investment rating on a scale from 1 to 10. See you there!
