Today's Trade: GROW

I covered the final 200 share position of GROW at $55.06 (entry at $71.95) for a $3378 gain (+24%). The total gain on the 400 share position was $4804 (+17%), making it one of the best short term trades I have ever had.

The trade could have been better, as I almost covered when the stock broke below $54. Instead, I put a stop at $55, and of course, it bounced back up. On the bright side, I am lucky that I put that stop in to protect profits, as the stock is now trading above $57.

While it's too early to tell, my guess is that GROW is not a broken stock. We are just seeing some healthy profit taking before the next move up. However, if the stock breaks down below the 50 day MA and round number $50, it would signal another shorting opportunity for me.

I've received a number of emails asking me how I was able to predict the fall in GROW. While I certainly do not have a crystal ball, the fact that the RSI did not confirm the new highs was a red flag that the stock would not sustain its momentum. As I explained in my post when I entered, this is one of my favorite setups.