Last week all the major U.S. indexes turned lower. The NYSE composite dipped 0.7%, the NASDAQ faded 0.8%, the S&P 500 gave up 1.1%, and the Dow lost 1.5%. The NASDAQ got hit with a sixth distribution day on Tuesday and that degraded the IBD outlook to “uptrend under pressure”. With the rally faltering, now is the time to reduce your long exposure and begin raising cash. Remember, buy and hold is the only sure way to catch every market downtrend. Take some profits, don’t let any profits turn into losses, cull your losers before they become even bigger losers, and never take a loss of more than 7-8% on anything. The key to long term investing success is to consistently limit your losses. Dust off your short watch lists in case the market rolls over into correction.
With the uptrend under pressure, it’s not advisable to be making new purchases. However, if you’re a daredevil, this week one watch list stock is currently in a proper buy range. GRFS, trading at $32.52, is still barely within 5% of a $31.21 buy point off of a 1st stage cup with handle base.
/as usual, your mileage may vary, always do your own homework
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