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Sabrient Select Opportunity Virtual Portfolio
Harvest Partial Profits in USG
Courtesy of Sabrient
As I have discussed before, I am a proponent of "profit harvesting," in which you take partial trading profits in a position once it moves strongly in your direction. In general, for swing trades, I would look to bank some profits once a stock position has provided a 10% gain. Today, we have an opportunity to lock in some profits in short position USG.
USG is down about -4.5% today on the weak housing numbers. Its current price of $14.35 puts our short position at about a 12% profit from the original entry price of $16.30. So, I recommend buying back 1/3 of the original short position at the current price or lower, if you can monitor it. This allows us to bank some partial profits while letting the bulk of the short position ride in anticipation of even lower prices. For the remaining open short position in USG, I will move the mental stop to a closing price above today’s high of $15.20.
Best Regards,
