Here’s how I’m ringing the bell on RingCentral ($RNG) (May 06, 2020)

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I want to look at RingCentral ( NYSE: RNG ) today and here’s why: The company reported earnings after the bell and you will see what the stock did; it really gyrated all around.

We had had a trade going here since I think this 222.00. We certainly could have got it earlier but we didn’t. We picked it up a few weeks ago at 222.00 and my idea was that the stock would break out; we were looking for it to break out back here on the 14th. We bought it right here on the 14th and the reason was because it just looked to me like the stock was firming up, close to breaking this trendline, which I pointed to here and then, boom, the next day it did. I am thinking, great, hopefully then this will run up through 250.00, keep going and really give us a quick payoff.

Well, it didn’t really do that, it did for a cup of coffee and then it fell back down. It ALMOST stopped us out, by less than $1.00, but kept the stop intact. And then the stock was up here yesterday and then today they report earnings after the bell. If you look at the way it traded pre-close this is what it looked like. The stock traded up into the close before earnings and then once earnings were released this is what happened, the stock gyrated around wildly.

We sold half of the position before earnings and that was the right thing to do. The idea being that you are locking in a profit so if the stock tanks and you have to sell your remaining half at whatever you bought them for, well, you still have a profit on the entire position.

But right now the reason I am pointing it out to you is because we are kind of back where we started. Where I am looking for this stock to break through 250.00. I have a partial position in the stock and I am not going to buy more until the stock breaks through this trendline, which is why I am setting an alert. If the stock breaks through this trendline then I will add to that position. But until it does I am just going to stick with what I have and my stop will be right down there.

This is how I trade around earnings. I learned a lot of this from Mark Minervini and just losing and winning a whole bunch throughout the years and kind of gradually figuring out how it is that I can hold a stock for longer than a quarter while still maintaining some kind of risk management. So you sell half, let the other half work. Add to that position again at a later time after the stock tells you that it’s going higher again.

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