Lock In Your Profits = Stop Loss

Jun 9th, 2009 – Comment

Dan from Sudbury writes about San Gold: The chart on this stock looks pretty good.Where should I have my stop loss on this stock. Hi Dan, We should be looking at the use of stops as a decision that will depend on the volatility of the stock. A stock that has a wider range of […]


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sangoldDan from Sudbury writes about San Gold:

The chart on this stock looks pretty good.Where should I have my stop loss on this stock.

Hi Dan,

We should be looking at the use of stops as a decision that will depend on the volatility of the stock. A stock that has a wider range of trading will need a little more room so that you are not getting whipsawed through the stop only to recover a few days or even hours later.

When you look at the weekly chart  its apparent that SGR can move at a $0.20 clip when the urge to sell gets going. From these levels I would say that a stop at $2.25  would not be unreasonable. If SGR  were to breach $2.25 it would have broken through support at $2.30 and would then test $2.20. Below that the next level of support comes int at $1.80

sgr2The daily chart shows that the stock has bounced off support at $2.30  sgr3so if you had set the stop there its very likely that you would have been stopped out earlier than when you may have wanted to. It also looks like in the last month that the stock has been trading in a range between support at $2.30 and resistance at $2.50.

If you are just buying the stock then you would be looking to stop your losses if you have been riding the uptrend since April you would be looking to lock in some profits.

Happy Capitalism!

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