I have NYT on my watch and was alerted of the abnormal price jump this morning. I checked news for NYT immediately and could not figure out why. The volume was so high that I could not resist the temptation guessing there maybe significant news, most likely M&A. I jumped in for a quick profit. No surprise, it turned out to be an emotional and reckless trade. My entry point (25.8) is again too high too late. The risk/reward ratio is way too high. I cut loss at 25.3 and shorted the same amount of position there. Covered at 24.75 to break even.
Lesson learned? Always, always think about the risk/reward ratio before acting. If I have missed the best entry point, let it go.
I later learned that sudden rise in NYT is due to the following news that is on today's headlines:
Rupert Murdoch's News Corp. offered to buy Dow Jones & Co. for $5 billion, The offer of $60 per share represents a huge premium of about 65 percent over Dow Jones' closing share price on Monday.
Yet another powerful example of how stocks move in groups.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment