Following what seemed to be a perfectly successful quarterly report on Monday evening, YY opened up today but then plowed steadily lower all morning. The stock found support at 117, and rebounded slightly finishing the day near 120.
But when a stock is down 11.5% (as of a half hour before the market’s close), it’s advisable to pay attention.
The portfolio bought YY at 61 in July 2017, and we sold half of our position on February 9 at 114. We still have a big profit on our remaining shares, so we can afford to practice a little patience, although I won’t just sit and watch as the stock grinds away at our profit.
Given the stock’s action, the numbers from YY.com’s report, both actual and estimated, are pretty much irrelevant. I have no idea why YY dropped like a rock and knowing why wouldn’t change the situation. After dipping as low as 117 late in the morning session, YY arrested its decline in the afternoon session, holding above 119.
That’s good enough for me to advise holding your remaining shares of YY to see what happens tomorrow. If we get a bounce, we may be able to wait out the stock’s recovery. But if we get more selling pressure, I will be watching technical support at 115 and will sell our remaining half position in YY if it drops through.
If you are still holding a full position in YY, I advise you to follow the portfolio’s lead by booking profits (if you have any) by selling at least half of your stake. That will reduce your exposure and make it easier to be patient. But if you’re in step with the portfolio and have already taken some chips off the table, sit tight right now.