Giving the Winners Room to Run
Tuesday's market performance was another example of why it's a dangerous market to be short. Yes, extended stocks are a dime a dozen, and good buying opportunities are getting harder and harder to come by, but these are not good reasons to be short. They are reasons to tread cautiously when it comes to new buys, but that's it. No reason to take profits and head for the sidelines.
Examples of extended stocks include Apple (AAPL), which is now 42% above its last buying area of $427, Priceline (PCLN), which is now 26% above its last buying area around $553, Lululemon Athletica (LULU), which broke out over $62 in January (shares closed Monday at $72.89), and Ulta Beauty (ULTA), which is now 19% above its last buying area of $76. There are scads of others as well. I can't stress the point enough: Don't chase extended stocks, or you could be sitting on a loss quickly....423 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.