Recouping our initial investment for the disciplined trader is done at a 100% gain. For most of us that would be at 2 or 3 cents. Recovering the "seed" money at .10 or .20 puts us in the casino category. So if we are gambling let's do it to win big.
Putting GTC orders at the .10 to .20 area at this time is not the best bet. You could get your dime while the price flag poles to .60. Making a mental stop at .10 - .20 may be prudent.
However, to put the odds in our favor we must work a little harder. First, when the PR comes out read straight for the "forward looking statements" and get a grasp on what the future revenue expectations are. Then do some math with PE ratios and earnings percentage estimates and we may come up with a profit taking point more like .45 or .60!
When the stock begins to rise there is an alternative to putting in a preconceived sell order. Watch momentum indicators. Level ll is not a necessity. Use a charting service like bigcharts or barchart. Set the time frame for 1 day, two days or five days. it is best to watch several time frames. On the one day - two day charts set the frequency to 1, 5 or 15 minutes. Then select at least 3 momentum indicators: MACD(Moving Average Convergence Divergence), AD(Advance Decline), OBV(On Balance Volume), RSI(Relative Strength Indicator), Stochastics and Bollinger bands. When these indicators reach historic highs and/or start rounding over then it is time to consider profit taking.
Some long timers talk of taking profits at .20. What is that number based on? If it is merely arbitrary perhaps some deeper thinking could go into selecting a sell point. Paying attention to revenue estimates and doing some math could determine an educated sell point. Watching indicators or buddying with someone who does could get us out at a better timed point.
An alternate thought is, Why sell? Any consolidation could be short lived as frequent news is likely to appear when KMAG comes out of the dark.
The point is, why sell immediately after such a long wait, when just some more waiting and thinking could increase profits exponentially.
