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Earnings Begets Relative Price Strength - Vol 1(2), REGENXBIO, Inc.


A quick recap: RGNX.

First rule of sale is met.

The inaugural blog post documented the strategy of using earnings driven price momentum to identify long purchase ideas. The first actionable idea presented was Regenxbio (RGNX). Here is a quick recap. After reporting earnings in early March, the stock passed the relative price strength filter. During the course of the following two weeks, the stock price pulled back and a position was taken with an initial price target of 37.04

Less than a month later, the stock price breached the target level, leading to the main subject of the second blog post: "when to sell."  As a refresher, there are two definitive sale rules. The first, eliminating half the initial dollar cost, occurs when a price return exceeds the return of the comparable index by 50%. The second, sale of remaining cost, occurs when a return exceeds the return of the comparable index by 100%.

Following the company's first quarter 2018 earnings release, the stock price traded up 13.5% today (5/9/2018) and through the first rule of sale.  From the purchase date, 3/16/18, through today's close, Regenxbio (RGNX) increased 47.8% versus the -2.4% price return of the S&P 500 equal-weight index.  As a result, a sell was executed to generate an amount equal to half of the original dollar cost.

Thanks for reading.

Disclosure: I am/we are long RGNX.