US Stock Market : When To Sell Stock, Cut LossšŸ©“šŸ”„šŸ‘

$Amazon.com(AMZN)$

In general, there are some intrinsic reasons to sell a stockā€”i.e., reasons that are related to the stock itself and/or the markets. In addition, the investor may also have extrinsic reasons to sell; by extrinsic, we mean reasons that are related to the investorā€™s finances or lifestyle. Occasionally, the sell decision may be triggered by a combination of intrinsic and extrinsic factors.

Letā€™s look at some intrinsic reasons or factors first.

When the initial buying decision was a mistake: Most experienced investors may have encountered this situation at some point. Youā€™ve watched this stockā€”or more likely, a meme stockā€”make phenomenal gains on a daily basis, so you finally decide to suspend your disbelief and recklessly put in a sizable buy order for the stock. But as soon as you do so, you realize that youā€™ve probably made a mistake. The best course of action in this case is to sell the stock, even if it means taking a small loss on the trade. And to avoid making the same mistake in the future, resist the temptation to chase hot stocks that are running on fumes, as they may burn you financially.

When the price rises dramatically: Selling a stock merely because it has risen dramatically in price isnā€™t always the best course of action. In some cases, the price gains may be justified by the companyā€™s underlying fundamentals (for example, its sales and/or earnings may be growing faster than investorsā€™ expectations). But in other cases, the price may have posted exponential gains purely on speculation, or due to other reasons such as takeover rumors or a short squeeze. In such cases, the investor would be well-served by doing some research to try and ascertain the reason for the stock gains, and depending on the findings, either sell the full position or sell part of the position and put in a stop order to sell the balance if it trades below a certain price. The more that a stockā€™s short-term gains contribute to your overall portfolio, the more critical the sell decision. For example, if you bought 1,000 shares of a biotech stock at $5 per share when your total portfolio was worth $25,000, that stock constituted 20% of your portfolio. If, after three months, that biotech stock quadrupled on promising trial results while the rest of your portfolio is unchanged, it would now account for 50% of your portfolio. In this situation, it might be prudent to sell some of your shares and book part of the profits, because of the negative impact on your portfolio if the stock retraced most of its advance.

When a stock reaches your price target: Have you ever owned a stock that has been down in the dumps for years, but suddenly has a new lease on life and is now trading at your original entry price? If you promised yourself that you would sell the stock if it ever came back to your buy price, dump it without hesitation (you shouldnā€™t have been holding on to that loser for so long in the first place, but thatā€™s a subject for another time). Similarly, if a stock reaches a level that it traded at all too briefly in the past, and you always thought that you would sell if it reached that price again, or would consider selling part of your position rather than regret another missed opportunity, then why not sell all of it?... Because of the next point...

When a stock trades at a technical inflection point: When a stock trades nearā€”and then breaks belowā€”a multiyear low, it often portends additional losses ahead. In this case, it may make sense to sell the stock as soon as the technical level is breached on the downside. Likewise, if a stock breaks through a key resistance level on the upside, it may signal more gains and a higher trading range for the stock, which means it might be advisable to sell part of the position rather than all of it. Technical analysts also watch stock price charts closely to identify other signals such as moving average crossovers.

When the fundamentals deteriorate: A stockā€™s fundamentals may deteriorate for any number of reasons: slowing earnings and/or revenue growth, increased competition, higher costs and lower margins, or simply valuation. The first such signal of deteriorating fundamentals may come from a companyā€™s quarterly earnings report, or sometimes from ā€œguidanceā€ ahead of an earnings report. Market reaction to negative news from a company, such as an earnings miss or lowered forward guidance, tends to be swift and unequivocal, with the stock likely to plunge by double digits. In such cases, the investor needs to determine whether the deterioration in the stockā€™s fundamentals is temporary or permanent. Since this is no easy task, it might be preferable to sell and exit the position first, then evaluate if it should be bought back later.

When a rival company issues bad news: Often, the problems affecting a specific sector may be highlighted when a bellwether company in that sector reports an earnings miss. If you own stock of a company in that sector, consider selling it unless you are quite confident that your stock will not be affected by the sectorā€™s woes.

When the market looks wobbly: This is no easy task, and is certainly not a suggestion to indulge in market timing, but there are times when the broad market looks overextended; at such times, it makes sense to cull the weaker names in your portfolio. In a financial earthquake, stocks of companies that have a heavy debt burden or a weak financial position might be the first to collapse.

Let's analyse Amazon (AMZN):

The tech rally was certainly a tailwind for Amazon at the end of the day, but investors were probably more encouraged by that research note. It was written by JPMorgan Chase analyst Doug Anmuth, who shared a very heartening update on the company's Prime loyalty program.

Following what he calls a "deep dive" into Prime's present and future, Anmuth came up with a new estimate of the program's value to its subscribers. All told, according to his calculations, Prime membership confers roughly $1,100 in annual benefits, such as free shipping and savings on items like drug prescriptions. This makes it quite the compelling value proposition even at the recently increased rate of $139 per year.

It also makes it an increasingly more attractive add-on for Amazon customers. Again according to his estimates, Anmuth says those yearly benefits totaled around $1,000 in 2020, and only approximately $544 in 2016.

Not surprisingly, the prognosticator is very bullish on Amazon stock. With his new take, he's maintaining his overweight (buy) recommendation on it, at a price target of $200 per share. This level is nearly double that of the stock's most recent closing price, even after Wednesday's pop.

Amazon Prime Day, the shopping extravaganza that has become nearly as important to the online retailer as the holiday season, will take place on July 12 and 13 this year.

Amazon officially announced the dates of the sale Thursday, noting that Prime members will begin to have access to early deals beginning on June 21.

Last yearā€™s Prime Day resulted in sales of over $11 billion, according to Adobe Analytics. Thatā€™s higher than Cyber Monday, but itā€™s an apples-to-oranges comparison, given the 48- to 24-hour timeframe difference.

If you currently hold Amazon (AMZN) hold your shares until mid-July 2022 at least.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • daz888888888
    Ā·2022-06-20

    $Amazon.com(AMZN)$ 

    U.S. stock futures gained following a volatile week in which whipsaw moves injected fresh volatility into markets.

    For the federal Juneteenth holiday on Monday, U.S. stock exchanges will be closed, as will U.S. bond and commodities markets, most banks and post offices.

    S&P 500 futures strengthened 0.8% and futures on the Dow Jones Industrial Average rose 0.58%.

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  • daz888888888
    Ā·2022-06-21

    Latest Global Stock News

    Stocks climbed in Europe and Asia on Tuesday, US equity futures pointed higher and Treasuries retreated amid improved investor sentiment compared with last weekā€™s rout in global shares.

    U.S. equity futures rallied on Tuesday with Dow futures up 1.7%, Nasdaq 100 futures up 2%, S&P 500 futures up 1.8%.

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    • Lebreau:Ā 
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      2022-06-21
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      2022-06-21
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      ok
      2022-06-21
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  • daz888888888
    Ā·2022-06-22

    $Amazon.com(AMZN)$ 

    $NVIDIA Corp(NVDA)$ 

    $Meta Platforms, Inc.(META)$ 

    The broader market was rebounding this morning, following last week's massive sell-off, and that helped boost the share prices of many tech stocks today. The result was Amazon (AMZN 2.32%) gained 3.8%, Nvidia (NVDA 4.32%) was up by 6.5%, and Meta Platforms (META -4.09%) jumped by as much as 2.5% and had gained 0.7% as of 11:07 a.m. ET.

    Investors appeared to be regaining some optimism that the market could be near the bottom and began buying up shares of some tech stocks again. 

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  • daz888888888
    Ā·2022-06-20

    $Amazon.com(AMZN)$ 

    Is Andy Jassy the Right CEO for whatlies ahead of Amazon? Amid one of the worst stretches for financial performance in Amazonā€™s history, the new CEO is working to cut back the excesses of an e-commerce operation the company expanded at breakneck pace during much of the Covid-19 pandemic

    Andy Jassy spent years running one of the fastest-growing divisions in a company famed for its rapid expansion. Nearly a year after taking over as chief executive of Amazon.com Inc., heā€™s learning how to tap the brakes.

    Mr. Jassy is tirelessly working to cut back the excesses of an e-commerce operation and at the same time, heā€™s trying to resuscitate languishing sales in the business.

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    • boomer9595:Ā 
      thanks
      2022-06-20
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      2022-06-20
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  • Kashcash
    Ā·2022-06-20
    //@tjhtjh:gg man//@daz88888888:$Amazon.com(AMZN)$ Is Andy Jassy the Right CEO for whatlies ahead of Amazon? Amid one of the worst stretches for financial performance in Amazonā€™s history, the new CEO is working to cut back the excesses of an e-commerce operation the company expanded at breakneck pace during much of the Covid-19 pandemicAndy Jassy spent years running one of the fastest-growing divisions in a company famed for its rapid expansion. Nearly a year after taking over as chief executive of Amazon.com Inc., heā€™s learning how to tap the brakes.Mr. Jassy is tirelessly working to cut back the excesses of an e-commerce operation and at the same time, heā€™s trying to resuscitate languishing sales in the business.
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    • Bobopo:Ā 
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      2022-06-20
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  • daz888888888
    Ā·2022-06-20

    $Amazon.com(AMZN)$ 

    1. Amazon ā€“ Overall Best Stock to Invest in

    Amazon was founded in 1994 and the firm went public just three years later. Since then, the value of Amazon stocks has increased by more than 175,000%. This means that had you invested $5,000 into Amazon back in 1997, your money would now be worth over $8 million.

    Although Amazon is not a dividend-paying company, the firm continues to reward shareholders in the form of continued growth that in many cases, outperforms the broader markets. For example, over the past five years of trading, Amazon stocks have increased in value by more than 235%. In comparison, the NASDAQ Composite has grown by 125%.

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    • SuccesInvst:Ā 
      Tks for sharing šŸ‘šŸ‘šŸ‘
      2022-06-20
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      2022-06-20
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  • MyrnaNorth
    Ā·2022-06-17
    Throughout Amazonā€™s history, the company has excelled in overcoming significant pullbacks in value. Despite shedding 30% of its stock price in 2018, a $1,000 investment in AMZN at the bottom of its dip on December 21st 2018 would still be worth $1,495 today - even despite a major market drawback.
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  • ChristKitto
    Ā·2022-06-17
    With AMZN currently some 44% adrift from its July 2021 all-time high value, itā€™s clear that the much loved investment option has been unable to escape the clutches of the ongoing bear market. However, following a recent 20-for-1 stock split, itā€™s hoped that Amazon may soon be capable of recapturing past glories.
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  • CrystalRose
    Ā·2022-06-17
    As a stock thatā€™s proven to bounce back emphatically from its past lows, investor optimism towards AMZN following the stockā€™s split may be justified in the long run.
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  • xuero
    Ā·2022-06-17
    cutting loss is the hardest part...still learning to trade without emotions [Tongue]
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  • 1M30
    Ā·2022-06-17
    Thanks for the article! The stock market can be tough to navigate especially during this bear market, stay strong everyone!
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  • BellaFaraday
    Ā·2022-06-19
    This is a good post and I will forward it to others.
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  • jas68
    Ā·2022-06-17
    emotions gets in the way.
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  • HilaryWilde
    Ā·2022-06-19
    I think Amazon may have further to fall.
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  • EvanHolt
    Ā·2022-06-19
    Your analysis is very professional, thank you!
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  • Windtalker78
    Ā·2022-06-19
    Buy in but around 103.
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  • breAkdaWn
    Ā·2022-06-18

    enter Baba!

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  • potatochips
    Ā·2022-06-17
    thanks for the article
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  • luckyjas
    Ā·2022-06-17
    Hold hold hold
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  • Lionel72
    Ā·2022-06-17
    I would be thinking a lot about this.
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