Some IBD 50 stocks flashed signals to investors that it’s time to sell as the stock market tumbled the past week.
The “M” in the CAN SLIM investing strategy stands for market direction. Since 75% of stocks follow the overall market direction, now is a time to raise cash. IBD changed its outlook to market in correction. That means breakouts often fail during these times and overall stock action is poor.
When stocks fall 7% from your purchase price, it triggers an automatic sell signal. Another sell signal occurs when a stock has given up double-digit gains from a buy point. This type of retracement triggers the round-trip sell rule.
It’s also time to sell a stock when it falls sharply below its 10-week moving average, or 50-day moving average, in heavy volume.
It’s Time To Sell These
Chinese online retail stock PDD Holdings (PDD) gave back gains of more than 11% from the 92.79 buy point of a cup-with-handle base. Shares plunged nearly 5% on Sept. 7 in heavy volume, as Chinese stocks sold off following weak economic data. The stock dipped below the buy point Thursday, finalizing the round-trip sell signal.
ACM Research (ACMR) also flagged the round-trip sell rule, after the stock relinquished profits from its cup base breakout from a 15.59 buy point.
The stock forged ahead to hit a 52-week high on Sept. 6, before a steep drop below the buy point triggered the signal on Sept. 15. ACM is holding around that level, unable to rebound.
Already Kicked Out Of The IBD 50
Some stocks weakened noticeably, which caused them to be removed from the IBD 50 earlier in the week.
Digital media stock Adobe (ADBE) gapped down over 4% in Thursday’s market sell-off and violated the 50-day line.
Shares sold off over 4% in heavy volume on Sept. 15, after the company reported its August-ended quarterly report, where it guided for only modestly higher profits and in-line sales. After that, Adobe held around the 50-day line but gapped below it Thursday.
Shares of FTAI Aviation (FTAI) also gapped down below the 50-day line on Thursday, in its fifth consecutive day of selling. The jet engine leasing company hit the 36.67 buy point of three-weeks-tight pattern on Sept. 1 before changing course to the downside.
Fitness beverage stock Celsius Holdings (CELH) is off about 18% from its 52-week high, set on Sept. 8. The stock saw steep selling in heavy volume Wednesday and Thursday, with the stock dropping below its 50-day line.
Intuit (INTU) fell below its 50-day line on Thursday after nine losing days out of 10. The business and tax software company’s shares have given back all gains from a 490.83 buy point.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
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