With the market flashing uncertainty, it’s time to look for stocks to sell to lock in profits before they disappear. These IBD 50 growth stocks have hit profit-taking zones.
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Many legendary traders agree that the best time to sell a stock is on the way up. According to IBD founder William O’Neil’s research, winning stocks that run up 20%-25% after hitting a buy point tend to pull back, build new bases and then may continue to climb.
He created a rule that once your stock has broken out, you should take most of your profits when they reach 20% to 25%. Following this rule and locking in profits helps prevent losses. It also can offset losses, which should be cut at no more than 8%, allowing you to lose twice and win once and still be ahead.
If market conditions are uncertain, like they are now, then you could exit the entire position. But if the stock still looks strong, you could sell a third or half to lock in gains. Remember, if you sell and the stock forms a new base, you can always buy it back at a valid buy point.
The 20%-25% profit taking area is shown as a green area on the chart with MarketSmith’s pattern recognition.
After Gains These Are Now Stocks To Sell
Workday (WDAY) stock is in the 20% profit zone after advancing from the 206.68 buy point of a cup base. The stock jumped 5.4% in heavy volume following the company’s better-than-expected July-ended quarterly earnings and sales report on Aug. 24.
Shares of the human resources and finance cloud applications stock hit a 52-week high on Friday.
FTAI Aviation (FTAI) is in the profit-taking area after climbing from a 30.26 entry of a flat base. The advance survived a sell-off after the company reported a mixed earnings report on July 26. The aircraft parts and leasing company started to rally in early August and formed a three-weeks-tight pattern with a 36.67 buy point. Shares hit an all-time high on Sept. 1.
Remitly Global (RELY) is extended from the profit zone of a cup-with-handle base with a 20.02 buy point. The stock jumped 20.6% after the company reported a smaller loss and higher-than-projected Q2 revenue on Aug. 2.
The global digital funds transfer stock is near its 52-week high. Shares are starting to trade tightly, so look for a possible three-weeks-tight pattern to emerge.
Freshworks (FRSH) is also above the profit target of a cup with handle with a 17.60 entry. The stock jumped 18.5% after the customer service and management platform company reported a second-quarter profit and sales beat on Aug. 1. Shares hit a 52-week high on Friday before pulling back.
Lastly, Kinsale Capital (KNSL) is a stock to sell as it’s entered the profit zone of a flat base with a 345.75 buy point after a bumpy ride since its Q2 earnings release on July 28.
The thinly traded property and casualty insurance stock hit a 52-week high on Friday.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
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