Adding to Clean Energy (PBW)

Well that was a quick move, so much for significant overhead resistance! However this is exactly the kind of action you love to see if you are bullish a stock or sector. We take some prudent risk management considerations and the stock just rips right in our face.

There are a few important lessons we can discuss with this trade evolution:

1. Regardless of what a stock does or should do based on our perceptions, we can't dwell on the fact that we were wrong and missed out on a little extra profits. We had our target acquisition and significant supply levels based on the historical price action. That's just reasonable risk assessment and management. As I have stated before "it's ok to be wrong, but it's NOT ok to stay wrong".

2. When the market proves us wrong we must adapt our thinking and not "dig in" with our beliefs until they are proven right. The market is ALWAYS correct, we are not. When we get such a strong signal from the market (stiff overhead resistance that the market doesn't even bat an eye at) you must respect that price action and align yourself with it.

3. You NEVER sell an entire position that is in a winning uptrend. When you have a winning position but you observe a strong sticking point ahead, at most you reduce the position by half. We cannot ever be 100% sure of a future outcome and trends can persist much longer than seems reasonable and rational. By only selling half the position we are still situated where we can further profit from increased price appreciation but are also covered against the most likely probability of a correction in price.

4. When a stock just slices through a very significant price/emotional level that is a VERY strong signal and the trend should continue.

With these new developments in mind, I added back to the position Friday and intend to hold aggressively above the $6.50ish breakout level. This prior resistance should become support on any future retests. This will be a key inflection point moving forward and a great place to set trailing stops .

We have now seen two consecutive weekly closes above $6.50 with this weeks' action, providing the breakout and buy signal. This has run 7 positive weeks in a row so some constructive consolidation between $7 and $6.50 would be a very welcome sign for trend health in the future.

You have to be willing to be flexible and unbiased as a trader/investor, when "plan A" fails you need to be ready quickly to flip to "plan B". You need to be able to get right back into a position if your initial idea is quickly proven wrong. There is no place for your ego in trading, the market will humble you every time. You need to be resilient and open-minded, if you are you will do fine managing your own investments.