How To Hold On To A Position For Big Gains

The below blog post is originally from Feb. 2014, but the techniques taught in the post and video are still very much valid. Happy Trading!

On December 19, we bought SolarCity ($SCTY), one of the top stocks on our watchlist, then added to the position as the stock surged higher.

$SCTY - SolarCity Stock Trade

Two weeks after our second buy entry, we locked in a solid gain of 25.8% by selling partial share size into strength of a powerful rally.

Now, we still remain long the original position we bought in The Wagner Daily newsletter nearly two months ago (presently showing an unrealized price gain of approximately 42%).

In this new 5-minute video, we walk you step-by-step through the trade, explaining the rationale behind each entry point (as well as the first exit point).

We also share with you the exact technical criteria that prompted us to buy $SCTY in the first place.

For best viewing quality, view in full-screen mode by clicking the icon on bottom right side of the video player window:

httpvh://youtu.be/65EUp-uku6c

To recap the trade entries and exits from the above video in text format, here’s how this high momentum stock trade went down…

$SCTY was already one of the top stocks on our internal watchlist. We monitored the price action of $SCTY as it pulled back to support of its 50-day moving average.

The stock subsequently bounced, held support of both its 20 and 50-day moving averages, and the trading range tightened up.

After a shallow pullback on light volume (which is bullish), we bought $SCTY at $53.94 on December 19 (above the prior day’s high). Strong volume confirmed that day’s momentum-fueled breakout.

Following up that surge by forming the handle portion of a cup and handle pattern on light volume, we bought additional shares of $SCTY at $57.88 on January 2 (again, above the prior day’s high).

The stock then gapped to new highs on strong volume, traded sideways again, rallied higher on increasing volume, then pulled back on lighter volume (touching near-term support of its 20-day exponential moving average).

We then sold the shares from our January 2 buy entry at $72.84, locking in a gain of 25.8% from our $57.88 entry point.

We remain long the original shares (from December 19 entry), which are currently showing an unrealized gain of roughly 42% (as of February 13 close).

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