Today’s sell off just confirmed my concerns regarding the market and possible addition to AFAM. This post is to finish my view at this stock. On some other web sites investors can read analysis about certain stock with possible future outlook, but then none of the web site comes back to the stock to revise their view based on the new market action. At least I couldn’t find any such web site. Even IBD which is providing very good reports and analysis gives you a view at a certain stock but next day the situation may become very different from what the report said. Once I read a stock report on FSLR which at that time was supposed to finish a cup of handle pattern, but market had changed and FSLR went down. I know that every investor shall perform his own research and all such reports shall be considered at maximum as recommendation. However sometimes further look at the stock by an experienced investor, trader or professional providing reports would be very helpful to any beginning investor. Such continuation can help to see more behind the stock movement.

This is why I am finishing this miniseries about AFAM because as per today I have made already my decision on this stock. If the market would be in a rally it would be easy to add more shares to the existing positions. The stock reacted well and as expected for a short correction. However today the stock was driven further down by the entire market sentiment, so adding new positions would be very risky. The positive thing is that the volume was low. It was still higher than average, but it is slowing down. The volume with the stock’s movement makes me wait for further development without taking any action. If the stock will touch my stop loss, I will sell. If it will go down, side ways or slowly up, I will sit tight waiting for it and buy new position when the price touches my first target price for pyramiding.

The entire portfolio will suffer small losses during this sell off period. Nobody knows when this will end. We may expect some improvement after the presidential election in November or later next year. Since then, no new trades shall be opened. For the upcoming period I will not take any action. I will contribute to the account with some cash making myself ready for future uptrend. It is difficult to be just waiting and looking at the portfolio showing red numbers, but there is no other way to do.