Fully Invested? – NTAP NKE PTI AMZN

The stock market continues to be strong and in a stock market such as this when the investor is buying positions in new companies every week there comes a time when the investor will say enough or even be fully invested. Basically using my analogy you may consider you have planted plenty of seeds in the garden and many of them are now growing quite nicely.

Let’s assume through your trading you consider yourself to have enough stock positions and many of the companies have grown quite nicely, the task is now to manage the companies you own. In fact you no longer need to watch the stock indices but just watch the companies you own very carefully. The task now is to trade your funds from the weaker companies into the stronger companies.

If you have companies that are moving up on a weekly basis there is nothing wrong with selling off or reducing the holding in your weakest companies that may not be moving much and using those funds to add to your stronger positions. Even in the stronger companies a time will come when they also stop rising and maybe even start falling. In this case it will be time to trade off parts of that position and move those funds into a new rising star.

Basically you will manage your collection of companies by always moving funds from the companies that are stagnant or falling and moving the funds into companies that are rising, trading this way is quite acceptable you simply trade part of one company for part of another. Using this methodology you will always be putting your money where it will work hardest. It would not be unusual to find yourself investing more money into one of your stronger stocks only to see you taking money back out of it later as it weakens. Who knows, if the company regains its growth you simply start putting funds back into it again.

I have just described a constant flow of money from your weaker holdings to your stronger holdings. This is a continuous process as companies come in and out of favor. Stock market timing is a fallacy you cannot know when to buy and sell. You cannot buy at the troughs and sell at the peaks. All you can do is follow the uptrend by adding and sell off as the trend turns down. Today with on line stock trading this is so easy and inexpensive to do.

Here are a few companies that have recently broke out on high volume. Add them to your watch list and study the reaction to the recent jump up. If they fall back on high volume then remove them from your watch list. I consider watching price and volume as probably the only real technical analysis you need. As an investment strategy this will beat most. If they stabilize in a quiet zone with very little selling then it’s time to buy using sell stops of 10% on just an initial small purchase of that company. Remember don’t buy if earnings are imminent.

NTAP - $34.84

NKE - $73.99

PTI - $25.02

AMZN - $140.96