The bearish close of last week triggered some of our sell-stops and we should sell the following positions today.
Aecom (ACM) settled below our sell-stop of 73 Friday, cutting through support easily. The stop was set as the portfolio’s buy price as part of our general capital preservation strategy. There is another level of support down at 68-70, around the 200-day moving average, for those wishing to hold.
Infrastructure & Energy Alternative (IEA) settled under 10.80, which price history suggests was support (and is now resistance.) Shares never extended their momentum from our entry, and should be sold, facing a negative technical outlook.
Lithium Americas (LAC) had a sell-stop set at our buy price of 27.60. Technically, there is support down to 25, with 24.22 another important floor.
MP Materials (MP) also had its sell-stop as our buy price, which is 45.01 for the Real Money Portfolio. Shares remain above the 200-day average, at 40.22 today, leaving some leeway for those who wish to hold.
We’re being conservative here. The technical picture for the three stocks with stops at their buy price suggests they could rebound, especially since selling volume overall has been on the lighter side, and the sector’s longer-term price actions suggest the larger bear move that started the year could be closing out. However, the general bearish situation for the sector makes us inclined to stick to our strategy of capital preservation and sell. In large part that’s because Greentech – and tech stocks – are back in sight of an important support level that would signal steeper losses if broken. We’re about 2.5% from that level entering Monday.
A suggested strategy for selling today is to wait until after the start of trading, which may see a gap open on residual bearishness. If the market is to bounce today, it should appear shortly afterward, so sell by 10 a.m. ET.
Our regular update will arrive this Wednesday. Please let me know if you have any questions or comments. You can reach me at brendan@cabot.net.