|BGCP continues to rise.... raising Limit Stop-Loss trigger to track the rise|
This is how I decide to sell a winning stock. I fully expect to trip the Stop-loss trigger at sometime. But I am giving BGCP a chance to continue on its rise.
It is the same approach I use to selling a loser... I set a limit as to how much I am willing to lose but don't sell outright. If the stock behaves and turns positive slope to the price... I will shadow it as it rises...initially to reduce my losses but if it enters positive gains again....I might remove the Limit stop-loss altogether if I see it has a great future.
You can see in the above chart BGCP has taken another nice jump of 34 cents so far today. We are now in sort of an area of concern. The stock is above the upper BB for 3 days in a row. The share price could pullback tomorrow or the next day.... VERY RARELY will it stay above the upper BB 6 days.
So I am increasing my Limit Stop Loss to grab a bit more profit while still giving it a chance to go higher.
By saying I'm "giving it a chance to go higher", I don't mean to say that I want it to continue to rise outside the upper BB.... that is NOT going to happen. I just want:
1. A slow down in increases allowing the upper BB to catch up, then move into the BB envelope and move positively inside while
2. The price rises stop at a level and the chart moves sideways into the BB envelope.
3. A minor pullback but not enough to trip the trigger and it will enter the BB envelope with a minor neg slope
What we would see is the stock undergoing a period of consolidation until the BB's get tight again.
In consolidation, the share price will gravitate towards the 20daySMA... I would keep the limit Stop-Loss in place during this consolidation as it is not guaranteed as to whether a major decline would happen.
When the BBs get narrow and another major change is in the offing, I would remove the Limit stop loss order if the breakout was up...not down
What I don't want to see is what has happened in June or July where the decline was very severe.
If it gaps below the Limit stop-loss, of course the order won't trigger. Then I would have to make a decision as to whether to sell immediately or wait for a recovery.... I hate those decisions :)
Looking at the indicators
There is no indication that tomorrow will be the day that the reversal will happen. The Slow Sto is solidly over 80 and no down tic... the MACD and BBwidth are ramrod straight.
I am looking for the Slow Sto to fall below 80 before I think there will be a decline. The Limit Stop-loss is just there to protect the gains in the event of a dramatic fall.
Oct 3: raising the Limit Stop Loss - 780 shares of BGCP at trigger of $14.75 to limit of $14.70