Here’s what I did with SailPoint ($SAIL) today. (October 01, 2020)
SAIL SPY MDY SAIL
I want to come back to SailPoint Technologies ( NYSE: SAIL ). I covered this stock yesterday, ironically, before the close because I had a doctor’s appointment that I had to go to. I liked the way this stock was breaking out. I had been tracking this with a trendline just kind of generally across these intraday highs.
My idea was, there has been enough time that has gone by after this little pullback. If the stock broke out in this kind of market this sector kind of had a chance of continuing to move higher. So on this day when the stock broke out above this trendline set your alerts they will make you money. My alert went off and I was at my desk so I bought some stock. And then the stock ran up really nicely after hours because what happened was the S&P added SailPoint ( NYSE: SAIL ) to the S&P 400 ( INDEXSP: SP400 ), which I believe is a mid-cap index.
That means all of the index funds, which are of course way too expensive. I digress but that’s okay, it’s my video. Go ahead and buy a mutual fund that tracks the S&P or tracks the mid-caps. You could do that and you pay them a nice 1.0, 1.5 percent management fee, whatever they are charging. Or you could just buy SPY ( NYSEARCA: SPY ) and not have to fart around with it. Or MDY ( NYSEARCA: MDY ) and just do that but you have to keep vanguard in business so whatever floats your boat.
Let me get back to this ( NYSE: SAIL ), back on track. The stock gaps up this morning; several people in our forum at Stock Market Mentor had a position in this. A lot of them just kind of bought when I did, where this stock was under discussion. And so then it pops and my initial instinct, when it does something like this is sell half. That is something that I learned from Mark Minervini just almost as a rule, that when you have a stock that just really jumps up 10-15 percent, take half off the table. Maybe take all of it, but take half off the table anyway just to block in a gain. You’ve still got some stock in case the stock moves more so you are not risking selling everything too soon but you are selling some.
So I waited on that; the stock runs up, goes up above $45.00, and ultimately gets up to 46.00. Once it got to 46.00 I kind of set a stop somewhere around here. I think that is actually what it was; this is just kind of day trading stuff, at least the way I did. I was looking at the way the stock pulled back here and I thought, okay, if it doesn’t rebound and instead keeps going, it is up so extended that it’s pretty easy to envision the stock just doing that. We have seen that a lot, a stock gaps up and then falls down.
I wanted to protect it and I put a stop right underneath here and then the stock rallied up a little bit. I watched it for a moment and thought, okay well, maybe I’m not going to get stopped out. And then a little bit later I did; 5, 10, 15 minutes later I got stopped out of half the position. And then at some point during the rest of the day I just traded out of the rest of the position because, frankly, my feeling was, hey, if the stock is not just continuing to go up then this is now kind of hard money. This is money that I have to really be monitoring it. And yes, I can set a stop and then trail a stop or something but come on, we are trying to make money here, we are not trying to be right.
Or to put it another way, I am not trying to top tick this trade, like, oh my gosh, I got a good one. I really got lucky, let me see if I can get even more lucky and sell this thing right at the top. Then, I don’t know, maybe I can get a custom license plate, drive it around California and it says Top Ticker. I don’t know, when you have got a stock like this and you’ve got a really good profit in it, don’t kick the bull in the butt because that thing might just turn around and hook you and that’s not a good place to be. It’s not a good place to be. It’s not good to be behind the bull for other reasons. But it’s not a good place to be staring that bull with the horns coming down on you either.
So you take your money, you don’t have to take it all at one time, but you need to have an exit strategy that you can execute just as you do a buying strategy and I have just shown you how to do it on SailPoint ( NYSE: SAIL ).
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