Reasons for entering the trade:
The company makes generators and had what I felt would be inflated earnings due to adverse weather. As the weather normalized, I expected earnings would normalize. Sure enough 1st quarter they missed on revenue.
Trade Assessment:
This was not an easy one. I used a stage entry, but probably entered too early 56is. on the first of the position. I allowed 2 R risk and when it dropped back under 60 I added @ 59 range. My risk limit was nearly hit in March but fortunately it sold off.
Exit: Why did I close the trade? Knowing when to get out on a profitable trade is the thing I find most difficult. For a trade like my BAC trade, I had a long trend that could use a trend line as a stop. That's not present on a trade like this yet. So after the first drop, I forced my self to stay in as it rallied back up to 55. What I did not like, was seeing it reverse yesterday after hitting the 200MA. It was acting much stronger than the broader market, so do I take the profits or the chance that the momentum fades and moving average support fails to hold?
Ultimately, I elected to take the profits. I considered phasing out partially but I elected to put the money into other opportunities. If it continues to rally, 54 range, it might be worth trying to reinitiated a 1/3 position.
