Reason2Sell

1. Reason2Sell Getting The Most Out Of Your Trades Mike Bellafiore

2. Most Common Reasons2Sell • Hits your price target • Intraday uptrend broken • Breaking news in the stock • Market is at important technical resistance • Breakings news in the market • Unusual seller on the tape

3. Most Common Reasons2Sell • Clear buying pattern dissipates • Time clock goes off in your trading brain • Too steep • Too much of a Pullback • Trading day ends 

4. 1. Hits Your Target • Have a target or set of targets before you enter a trade • Follow your plan and hit out when your target(s) are reached

5. Consolidation at the 43.00 level provides short entry with a 41.50 price target Prices reaches 41.50 target, then pulls back into the Close

6. 2. Intraday Uptrend Broken • Zoom out to the 5 minute or 15 minute chart after 10AM • If a series of higher lows is broken, hit out

7. ...after sharp down move, it fails to make a new low, providing a clear signal that the downtrend has ended GNC begins clear downtrend off the Open, and short opportunity is provided when a 38.45 buyer drops...

8. 3. Breaking News In The Stock • If unexpected news suddenly comes out, hit out and re-evaluate • It could mean a huge fundamental change in the company

9. ...however, after breaking down through range, JCP CEO announces better than expected store sales for May, leading to a quick reversal A held offer appears at 22.00 in JCP, providing a short entry opportunity...

10. 4. Market Is At Resistance • Most stocks follow the overall market • If the stock and the market are both nearing big resistance, higher probability of a reversal

11. SPY reaches technical resistance area that it has failed to hold above for the past several days...

12. Simultaneously, BAC reaches 7.70 resistance area… …but sells off when the market fails at resistance

13. 5. Breaking News In The Market • If a big event occurs and causes the market to move erratically, hit out and re-evaluate • Can be an economic number, Supreme Court decision, terrorist attack, etc.

14. ...at 14:00, FOMC announcement is released, and the statement is bearish for stocks, leading to an immediate selloff into into the Close On 8/1, CAT begins to form uptrend after 11:00, providing an opportunity to get long...

15. 6. Unusual Seller • If the stock tries to get above a price several times and fails, hit out • If you notice a lot of selling at a level and the seller steps lower, hit out

16. ...unusual seller appears at 69.50, a signal that longs should exit their position and re-evaluate FOSL begins clear uptrend in the morning, with several opportunities to get long...

17. 7. Buying Pattern Dissipates • If a stock is showing a distinct buying pattern, but it disappears, hit out • This can be a set of consistent pullbacks, a set of consolidation flags, etc.

18. ...once the buyer disappeared above 50.25, the buying pattern was clearly gone, and the stock pulled back to the original price After ranging off the Open, a massive buyer appeared on the tape at 49.54, driving the price of the stock up over .70c very quickly...

19. 8. Time Clock • If after a specified amount of time the stock hasn’t done what you expected, hit out • Wait for the stock to give you more information before getting back in

20. Seller appeared above 21.00, offering excellent short opportunity… FMCN was strong off the open due to strong earnings news from other Chinese stocks… …however, was not able to move away from the price and stayed there for several hours – a signal to exit the position and re-evaluate

21. 9. Too Steep • If a stock goes down or up too far and too fast, it will likely bounce right back • Take some off into the move and look for a place to re-enter

22. ...however, a move of over 1 point in 30 minutes is quite steep for this stock, a signal that a pullback is likely to follow... CVS drove higher off the Open the day after being sold off on earnings...

23. Too much of a Pullback

24. Contact www.facebook.com/smbcap @MikeBellafiore mbellafiore@smbcap.com www.smbtraining.com/blog