Yes, I'm Trading SoFi and Rocket Lab — Even When It Hurts
Some of my Friday trades do not make me very cheerful. But what is a plan if not followed?
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This piece is in the name of capital preservation and an attempt to remain transparent to my readers, which is difficult when one writes just a couple of articles every morning. Why is that? Well, I take a lot more action than I get the chance to write about and sometimes I even change my mind. That said, I have been forced by my own set of rules for risk management to make some trades Friday morning that do not make me very cheerful.
My rules are my rules for a reason, and while occasionally costing me opportunity, they have often saved me from the side of myself that can get aggressive. I am a former Marine infantryman. I am a multi-decades NYSE floor trader. We tend to have egos, and we also have to learn to check those egos in order to remain true to our rules, our core set of values and true to those that are reliant upon us.
Okay... Here Goes
I wrote to you earlier Friday that I had added to my long position in one of my favorite stocks, SoFi Technologies SOFI. I wrote to you on Monday and told you that I would buy these shares down to its 200-day simple moving average (SMA). That's what I did. Though the stock had pierced that line, a line is not considered lost until contact is broken.
I also wrote to you on Monday and told you that my panic point was the loss of that same 200-day SMA. That happened Friday morning when SOFI gapped lower. That does not mean that I have to exit the name. It does mean that I have to do something.
This morning, suffering an overnight loss (on a Last In, First Out basis) despite still having nice gains over net basis, I made a sale and reduced my exposure to the stock.
Readers will see the action in SOFI at the lower right-hand corner of the chart. On Thursday, the 200-day line was tested, so... I bought. On Friday, the 200-day line was lost. I sold a portion of my shares.
This takes discipline. It hurts, but what is a plan if not followed?
Horses of a Different Colors...
I wrote to you last week and told you a similar tale concerning my long position in Rocket Lab USA RKLB. I told readers that I would add RKLB down to its 200-day SMA, and "panic" should that line be lost, just like with SOFI. Well, RKLB is indeed testing that line, but it is yet to break.
Hence, I am still adding to this long position, but I am ready to make an about-face if I need to. Let's hope some good news on the tariff front crosses the tape and there is an algorithmic reaction.
As for Palantir Technologies PLTR, that one is nowhere near my add limit or my panic point, so even down a boatload as it is this Friday, I am not in need of taking action as I am in the above-mentioned names.
Sometimes...
Trading is a contact sport. Trading and investment can be as beautifully done as a fine piece of art. At other times, one must be ruthless. Even with oneself. That's the reality.
Have a nice weekend, kids.
At the time of publication, Guilfoyle was long SOFI, RKLB and PLTR equity.
