Natural Gas Correction Proves Profit Taking Always A Good Thing
I have been criticized heavily for selling my position in Chesapeake Energy (CHK) as the stock climbed to new highs over the last few months. As I mentioned in previous posts, the move higher looked closer and closer to a parabolic climb. These climbs typically end up ugly. Well, it’s been ugly over the past few weeks.
Chesapeake peaked at approx $74 a share and is now under $50. It seemed that the stock would go up continuously and all Chesapeake supporters screamed how it’s ridiculous to sell this stock. The CEO himself said that it’s a hundred dollar stock. The funny thing is I believe most of this. I think the stock will go higher, maybe even hit $100.
However, when a stock is skyrocketing higher, revealing more and more profit opportunities, you have to take advantage of them. You must cash in your profits when you can, because you might not be able to down the road.
I love the company, and I bought more at $55 as it’s dropped more. If it continues, I’ll buy more. If it shoots up in a similar fashion, I’ll sell again. Ring the register when you can, most stocks that seem too good to be true will get hit with a correction at some point.