Let’s wrap up our trade on Innovative Industrial Properties ($IIPR) (January 28, 2020)
IIPR
I am going back to the well one more time with IIPR ( NYSE: IIPR ). The reason is because I have been featuring this on our Free Chart Video and there are a lot of people that are only members of the Free Chart. In other words, you are just on my email list, you are not premium members and that’s okay. Every once in awhile I like to throw a fish out there and put it on your line and this is one of them; I just want to carry this all the way through to help people get out of it.
We are back in here last week on this little pullback. It was one of the only pot stocks, they buy land to grow that stuff, but this was the only stock that was up that significantly. So I said, “Hey, let’s buy this thing.” I am expecting it to kind of come out and keep pushing out of this base and it did that. So let’s look and see what we are going to do now.
I am keeping this on our Growth Stock List so this will remain under coverage, where I am giving you buys and sells and stops, stuff like that. But what I did today was, I sold some and then the rest of my position, today, into all of this strength. But then when the stock did not really sell-off I decided that I would go for my second price target, which was $100.00, so I created a completely different trade, not a continuation.
My new trade is buying the stock here a little bit above the 200-day moving average, it’s a starter position, and then if the stock pulls down below 90.00, I think it is around 89.50 or so if the sock pulls back to 89.50 then I am going to go ahead and sell and take a small loss on that trade. But it’s about a 3 percent risk on a very small position that, hopefully, I am hoping to build. It would be easy enough to see this stock ultimately get through 100.00, 120.00 etcetera. But this was such a big fast move that it was almost a sin if you just didn’t sell any at all.
When a stock that you own moves up quite a ways really fast you really need to be thinking about taking some profits off the table. It doesn’t have to be the whole position but at least ring the cash register on some and then you avoid the risk that you are going to have kind of a round-trip. And then when the stock comes back down closer to where you bought it, even though you are still up on the trade, you are still feeling like a loser because you could have sold it much higher.
I say, don’t wait for the stock to pull back; when a stock is up a lot sell some of it, keep some of it, then you are always good. If the stock keeps going you are happy you are you kept some. If the stock reverses you are happy you sold some; that’s probably about the only free lunch you are going to get in this business.
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