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I decided to close my trade in NutraCea (NTRZ.OB) yesterday at a price of $3.50.

I still believe in the long-term future of NutraCea, but I have been growing more cautious in recent weeks about the general market, and I felt it was time to book some profits and move into cash. After touching a new high just over $3.60 on big volume, I’m not sure that the stock will be able to bring in enough buyers keep this current price afloat. Volume has to fall off in the afternoon, and I would imagine their will be a lot of sellers in this market ahead of Friday’s pivotal PPI.

For me, this move is all about protecting profits and cutting risk in what appears to me to be a very dicey market environment. We are now looking at 7 up days in a row for the Dow, so simple statistics says that we’ve got to get a down day at some point this week.

My fear is that the down day might come on Friday after a hot PPI reading, and that down day might be of substantial size. Therefore, the risk is not worth the reward to remain in the market, so I am moving to cash until things settle out. Given that I had my basis at 2.84, I have pocketed a solid 23 percent gain here. I will probably be looking to reenter the position on weakness.

NTRZ 1-yr chart
NTRZ

Source: NutraCea: The Risk is Not Worth the Reward