- Why are you buying this stock? - Be absolutely clear about your reasoning, typically you should exit position when the reasoning does not hold true anymore.
- What is your target price? - In case stock moves in your preferred direction, always make sure you take partial gains.
- What is your exit price? - In case stock moves in opposite direction, always keep your losses low.
- How long are you willing to hold the stock? - Typically you hold as long your reasoning for buying remains in place along with your targets in place.
- How much loss are you willing to take on this position? - The lower the better, however you need to determine this before you actually buy the stock. The loss is determined based on how much risk you are willing to take and is also known as STOP LIMIT price. If the stock reaches or drops below that price you sell the stock at any circumstances.
So should our reader HOLD or SELL?
Based on current chart, it does not make any sense to hold this stock unless we are willing to take further downside risk. However, considering the stock is in support zone, as long as it holds above 13.5 it has a chance to move up. But the hold period might be longer as we do not know when the stock will make a move higher. Remember, the ultimate decision should always be yours and unless you are convinced you should NOT act.
Well, so whats your verdict!!!