Sold to close CLD


Sold 4,000 shares of CLD at $2.54. This closes the position originally entered on 7/6 at $2.15. Total return less commission was $1,561.30. Return per share after commission was 39¢.


I opened this position last week with a price target of $2.75. I did not achieve this target, today. Still I sold the stock, because I didn’t anticipate to have a day like today, with the stock up 13.3%. This is a 4 standard deviation move. With the gain I had already accumulated, I collected about 18% in just under a week. While it’s possible, that the stock has another day like this tomorrow, I can easily cope with that outcome. What would have been very difficult to accept, is to hold the stock, only to see it lose much of its gains again, tomorrow.

I don’t see a strong case for either continued upside or a break-down tomorrow. That being so, this sell was a matter of hygiene for me. It’s no longer a concern for me, now, but to me the negative aspect is the relatively modest volume today. Above average, yes, but to lend credibility to a 4 standard eviation move, I expect multiples of average volume, and we didn’t see it. On the plus side, this move was corroborated by other coal producers also posting strong returns. I’d slightly lean towards continued upside for tomorrow, but not sufficiently so to stay in the trade.

July 12, 2016 at 2:10pm · CLD · sell to close · stock

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