Keeping It Real…

| March 11, 2013 | 0 Comments

For a second week in a row, I’m inclined to reach into the old mailbag and answer subscriber questions.  Thankfully, this week’s subscriber heeded my advice for useful questions.

Here’s the latest from Demiregen…

“I’ve bought tsys at 2.44. It has been constantly going down. ıs there something wrong with tsys?  Should I hold it or sell? Thank you very much for your help.”

Now, before I answer the question, let me state that I’m not really going to tell you what YOU should do.  When I answer this, I’m going share what I see with the stock, and how I might handle the situation.

But trust me, I’m keeping it real.

So we’re talking about the penny stock TSYS, or Telecommunication Systems.  It’s a micro-cap tech play focused on turn-by-turn navigation and E9-1-1 call routing.

Let’s look at the chart to get a better understanding of what we’re going to discuss….

Telecommunication Systems

When we look at the 1 year chart on TSYS, the first thing to jump out at me is that the stock has traded at $2.44 (red line) more than 4 times over the past 52 weeks.

And if you’ve purchased the stock at point 2, 3, or 4 in the chart above, I don’t understand why you’re panicking yet.

Seriously, you do understand that stocks trade both up AND down… right?

No really… I’m being serious here.

To me, it looks like you’re getting worried over a slight variation on this chart.  If we were talking about the stock trading down at its first support level (black dotted line) of $2, then I could say we might pay closer attention.

Or, if we were at the next support level of $1.75 (green dotted line)… you may want to get worried.

That brings me to my whole point for answering this question…

If you’re using TSYS as a trade, then you’re looking at a whopping 10% drop.  I want you to consider that in the context of where the stock has traded in the past 52 weeks- specifically the low back in August of 2012.

From that point, the stock has doubled!

So, if you’re trading this stock, you need to stick to your targets regardless of the price movement.  Simply put, if you’re trading with a 10% stop loss… you should have sold it.

But if you’re trading using a 20% stop loss, you’d still be hanging on to it with no worries.

Wait… what… what was that?  You don’t have a trading plan with buy/sell targets?

Well, I suggest you learn a bit more about how to trade stocks before randomly buying them.  It’s not like buying a pair of shoes you’ll put on your feet every day- it’s a bit more complex…

Now, if you’re investing- it’s a whole different ball game!

If you really ARE investing in TSYS, just ignore the trade and come back in 3 or 6 months to check on it.  A medium- to long-term investment shouldn’t be watched over like a pot of boiling water… you’ll go crazy if you do that!

Simply let your investment decision run its course and whatever you do- don’t try to time the market with investments—you’ll almost always sell your winners while they’re still losers!

Until next time,

Brian Walker

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Category: Penny Stocks

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