Here I am again, trapped between my trader-self (which wants to take a profit on the bird in the hand) and my investor-self (which is eying the two birds in the bush). The source of my conflict is CEL-SCI (CVM) of course… which is up about 111% since we bought it back in June, and is surging again today. The concern is the possibility that the stock really can’t go any higher than the recent high of $0.81 without moving considerably lower first.
The chart shows it pretty clearly. There’s something about the $0.78 to $0.80 cent level that CVM has a tough time with. That’s not to say the stock can’t or won’t break though – it’s just going to be tough to do without the benefit of a base or support level nearby to push off of. Perhaps when the rising support line from February’s low catches up with the stock the odds of a break past $0.80 will better.
So, weighing the risk and reward from a short-term and a long-term perspective, I advocate taking partial profits here at $0.79. That’s a triple-digit gain on part of your position, which ain’t bad.
If I’m wrong, the worst-case scenario is that CEL-SCI moves and stays above $0.80, and builds a base there. If so, we can just rebuy it there later… and perhaps miss a few cents worth of gain in exchange for the sure thing we have now.
If I’m right, then we’ll all be spared the move back to $0.50/$0.55, where CEL-SCI is most likely to find support again in the absence of any other support lines.
Either way though, I’m a long-term bull (as in months to a year or more) on CVM. I’m just picking and choosing my battles.
By the way, when I say ‘partial profits’, I mean sell half your position now, and hold the other half for later. That way you can abate some risk, but not give up all of a potential reward. It’s the ultimate hedge.