Then CHKR went on a huge nosedive, from a high of $30.21, down to $17.37 just some days ago. I re-entered at $18.93 based on classic technical reversal pattern.
- Bounce off multi-day bollinger band penetration (six red candles in a row, all crossing the lower bollinger band)
- EMA-5 (green line) flat
- RSI bottomed out below 10 and climbing
- MAC-D crossing upward (blue line crossing yellow) under the center line
So far I've been rewarded - CHKR is up 4.91% in 3 trading days. My usual rule of thumb is that if a stock makes more than 1% per trading day, you are better off selling than holding, as you've likely hit a short term spurt, with a pullback will follow.
However, as this is a dividend paying stock, I'm planning to hold for longer, or even increase the position if a trend develops and I can get back in on a pullback. If the current spurt gets much bigger, and it looks ready for even sharper pullback, I'll be looking to sell at somewhere near a daily high to maximise use of capital. Short term profits over-rule long term dividends in my trading plan.
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