Saturday, February 5, 2011

My Cirrus Logic Profit of $34,000

 Click on the above image to enlarge

Click on the above image to enlarge

Date Bought: Jan 13, 2010
Price: $18.49
Quantity: 6,800
Reason Bought: I bought this stock because the chart looks nice with a very strong upward trend. The MACD and Stochastic also point to a big buy for this stock. I also bought this stock because of Apple. Apple products has been very well received and it looks unstoppable. Cirrus Logic supplies the sound chips to Apple and its revenue and profit have been increasing from quarter to quarter.
Mistake: After I bought at this price $18.49, the stock tumble to more than 5%, even though I regretted it because I should have bought it at the lower price, but I continue to hold on to it because I faith in myself and also this stock. 
Date Sold: Feb 3, 2010
Price: $23.25
Quantity: 6,800
Reason Sold: The reason I sold because I was panicked and stupid. I was watching the live stock ticker move and when I saw there is a sudden drop in the price, I was panicked and sold the stock immediately. I sold it because I thought that if the stock continue to go down towards the end of the day, then it will show a shooting star pattern which is extremely bearish especially for Cirrus Logic which is overbought at the current level.
Another reason I sold is because Cirrus Logic is moving up too fast and too furious. Normally, I believe when it move up too fast, it can also come down very fast.
Lesson to be learned: I should have hold on to this stock for another 7% gain. I should not have look at the live ticker as it can be very deceiving. The sudden drop in the price ticket may be the worked of the stocks opeartor trying to scare the current holders into dumping the stock. Instead of looking at the stock ticker, I should have looked at the results 30 minutes before the market close, as it better reflects the position, movement and momentum of this stock for that particular day.
Profit: $ 32,000
Whatever it is, what is sold is already sold, no matter how much I regreted it, it is now useless. However, I am not done with Cirrus Logic yet, I am now waiting at the sideline for the stock to consolidate before I jump into this stock again. A fellow visitor to my blog ask me why I did not jump in now at this level? Based on my experience, if I were to jump back into this stock, it is very dangerous as this stock is obviously in a very overbought level, if I were to buy back now, this stock might immediately consolidate and I can lose more than 15%.
Money is hard to earn, it is easy to spent. I do not dare to take this risk as I have experienced before of jumping straight in and lost tremendously, I think it is better to be safe than sorry. After all, I have already make $32,000 in profit and I should be glad and contented.
I just hope that with this experience I can learn more from it and be more sharp in my entry price and selling price. Some experts in this field have claimed that it is almost impossible to buy at the very bottom and sell at the very top. I at The Market Oracle think otherwise, I think you can buy at the very bottom and sell at the very top if you have the skill, experience, faith, six sense and a bit of luck on your side, you definetely can do it.
I have previously posted on my Cirrus Logic leading to the day I sold this stock. Please refer to my previous posts on this stock.
Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 

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