I look at six indicators to determine when to sell. No single signal indicator is a sell decision for me, that's why I use six. By knowing these six items I make a consensus in my mind and decide. They are:
- Barchart technical sell signal - I look for a 50% sell in the mid-term indicators.
- Trend Spotter (tm) sell signal - Trend Spotter (tm) is a computerized trend analysis system developed by Barchart.com. The system uses a combination of wave theory, market momentum and volatility in an attempt to find a general trend for a specific market. Trend Spotter attempts to cut losers early and let winners run.
- Daily moving averages - Is the stock below its 20, 50 and 100 day moving averages?
- Recent price movement - Has the stock lost 10% off its recent high?
- 14 day Relative Strength Index below 50%. I also compare the 14 day RSI to the 9 day RSI to see the direction of the trend.
- I run a 60 minute chart showing 20, 50 and 100 hour moving averages and a 14 day turtle chart.
Now I know this sounds like a lot to do and if I had to compute all these in every decision I'd have no time for myself. On Barchart I set up my portfolios to have these computed for me automatically and the charts are my default chart. Just a press of the button does it all.
Now let's get back to why I'm deleting Public Storage (PSA) from the Barchart Van Meerten New High portfolio. First the chart:
Click to enlarge
It's obvious that the stock is in a downward trend. Now let's look at the technical factors:
- Barchart 40% short term and 50% mid-term technical sell signal
- Trend Spotter (tm) sell signal
- Trading below its 20 and 50 day moving averages
- Lost 4.97% from its recent high
- 14 day Relative Strength Index is 44.61% and dropping
On a last reality check before I press the sell button is a 5-minute trading chart:
Click to enlarge
I'm not scientific but at least I have a discipline.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I sold Public Storage (PSA) this morning at the opening.