The major indexes are tilted to the upside to start the week, with the Dow up 95 points and the Nasdaq up 11 points near 11 am.
However, under the surface, we’re continuing to see increasing selling pressure on most growth stocks, including a bunch of names from leading areas like software and cybersecurity. While the overall market has shown some positive signs, it remains vital to take things on a stock-by-stock basis, both on the buy side (looking for early-stage opportunities that have recently shown great buying power) and the sell side (honoring stops and loss limits).
Today, both Coupa (COUP) and Okta (OKTA) are under a ton of pressure, along with everything else in the group. While we don’t advise reacting to a bad day here or there, we’ve now seen many weeks of distribution and sloppy action in the group, with the recent selling pressure a red flag, at least in the intermediate-term.
Today, then, we’re going to take the rest of our profit in Okta (OKTA); we trimmed a few more shares last week, leaving us with a little less than half our original position, and today we’ll dump the rest.
We’re also going to sell one-third of our shares in Coupa (COUP), which is one of the best looking names in the entire sector. But the stock’s had a big run and last week’s breakout attempt has failed.
These sales will give us a cash position near 40%, which seems too high given the overall market environment. That said, we’re OK holding that for the moment as we wait to see whether the growth stock selling spreads to other areas, or if new leadership emerges.