cnxt buy, hold, or sell?

Question

I own shares of conexant (cnxt), I bought it @ 3.35 and it's now down to 2.40. I'd like to get some advise on this one. is this a buy, hold or sell??

Answer 1

You've definately taken a beating on this one. You should check into "Money Management" principles for your own self-assurance

You didn't say whether you bought it on the rise in March, on in the decline in May.

If you bought it on the rise in March, then you had a $0.20 profit in April, at which point you should have set a stop at your entry point.

If you bought it in the decline, and it has been going against you from day one, nobody takes more than a 20% hit right off the bat. At 10% or 20% immediate loss, then you're wrong, and you get out. You let it go against you almost twice that amount. Not good business. You are breaking every rule in the book with that huge percentage loss. Warren Buffet would castigate you.

The best time to make these decisions is before the trade is ever executed. After it's on, with money on the line, it becomes emotional, and emotional decisions are rarely on target. So when you buy, set a protective stop immediately. That is part of what is called a Trading Plan.

Your stock is acting well, and following along with the market nicely; not lagging. It popped up on the close today from $2.36 to $2.50 in the last five minutes with the highest volume of the week for any 5-min period. So there is definately still buying pressure.

You seem to have lucked out this time. I would hold it, now that the market has turned around to the upside. But I would also set a stop at $2.30, because the market is forever uncertain.

Good luck. Read a little; you'll enjoy it, instead of living off of hope and fear.

Answer 2

It looks like Conexant will rebound to its former support level at $3.25 or so. It won't go much further than that, though, I don't think. If you can, put in a limit order to sell at 3.25 and wait for it to tick back up.
And yes, you did get lucky this time. You should really keep a closer eye on your positions...