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.