Sell One-Quarter Position in Cerence (CRNC)
The market continues to be extremely challenging for growth-oriented stocks and many of our names are trading near support levels. It’s one of those environments where, with many stocks down 20% to 40% from their highs, it’s an entirely “normal,” albeit significant, correction. In other words, we expect these environments to come along every now and then, pass, and on we go. Maybe not to new highs straight away, but eventually.
That said, we don’t want to minimize the reality that a lot of charts look just plain awful. One that I’ve been watching carefully this morning is that of Cerence (CRNC), which is trading fractionally lower than the intra-day low of 83.03 from March 5. We have yet to take any gains here and while I hate to do so now, with CRNC 40% off its high and at an area where it could easily bounce 20% in a matter of days, we would clearly be regretful if we do nothing and CRNC really falls apart.
The best way to balance this situation is to take partial gains. Let’s go ahead and do that by selling one quarter of our position for a roughly 70% gain. We can always buy back later. SELL A QUARTER, HOLD THE REST