Casa Systems (CASA) has been on a tear, running almost 15% today. Is it too late to buy, or is it time to sell? (March 12, 2018)


Casa Systems ( NASDAQ: CASA ). This has been on our Growth Stocks list for at least the last week; we looked at it the week before. The company reports earnings, the stock is moving. Today the stock is up, at one point it was up 15 percent, so this has really strong momentum. It is an IPO stock, which under the Fitzpatrick’s rule of trading means you wait for the stock to hit an “enthusiasm high”, which, as it would turn out would be right there; pulls back, drifts sideways for a while. Then once the stock breaks to a new high, this would actually be the time to be buying it relying on the fact that once IPOs start hitting new highs everybody is a winner.

You can still be trading it around here but once the stock breaks out to a new high on volume you want to be long this stock. Well, the stock is still printing higher lows and higher highs. My issue with today is huge massive volume and a big move in a price. So seriously, as a function of risk management and because you want to do a nod to the Gods of Wall Street, you have got to be selling into this. You don’t necessarily need to sell all of what you have but you do need to be selling into this.

This stock will not just keep going up forever. If it was up 1 percent, 2 percent today I probably wouldn’t say that. The stock is up, over the last two days of trading, the stock is up 20 percent (I am just taking the 8th as a reference point at the end of the day), the last two trading days the stock is up 20 percent. Trust me, that is the time to be taking some profits. I am not bearish on the stock I am bullish on the stock. But again, 20 percent in two days; that’s money to me. So go ahead and take some profits. Wait for the stock to reload. Now, you can decide that Fitzpatrick’s wrong and you are just going to just hold the stock and that’s okay too. Because again, I think the stock ultimately moves higher. But just as a function of price movement I want to be taking some off the table (I did today) and wait for the stock to reset.

But here is my question to you: Let’s say the market has kind of peaked out today, maybe we will get another day or two of maybe some pullbacks. If Casa ( NASDAQ: CASA ) falls back here to $27.00, maybe 26.50, there is nothing wrong with this trend. There is nothing wrong with this breakout but you are down 11 percent from where you are right now. So how are you going to feel then? Are you are going to feel like, well, you are okay to hold through this? Or are you going to be feeling like, maybe I should have sold some? That is my question to you. You figure out the answer. For me, I am out of this thing now. I am waiting. I am hoping for an opportunity to reload.

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