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Shifting Gears

#ChartzwithJartz - With uncertainty looming in regards to inflationary pressures and continuous press releases of capital gains tax reform, the market has seen irregular levels of volatility. In previous posts, we discussed the Investment Management Team's (IMT) overall strategy to buy and hold securities through the anticipated summer volatility. As the IMT continues to monitor our holdings and analyze charts, we determined that multiple holdings in GAME Day and GAME Time were over stretched, meaning there is a possibility that the upside is limited without some sort of correction to the downside. One of the holdings that was sold today was Schlumberger Ltd (SLB). This oil equipment & services company made a substantial move higher at the end of April and in to June. Depending on the price the security was purchased at, the realized gain was around 40%. The IMT believed SLB was running hot and had drifted too far away from the Moving Average Lines, as shown below. This separation in price could signal that the security is over bought and may experience a correction. Another technical indicator is the Relative Strength Index (RSI). If a stock is purchased in high volumes and the price moves up too quickly relative to past performance, the RSI indicator will pass above 70, typically signaling "over bought". We saw this scenario play out in the beginning of June and with a possible 8% drop to the closest line of support (20 Day Moving Average in green), the IMT saw it fit to realize the gains and free up cash. For more updates on trading activity, tune into our blog every Wednesday afternoon. *Other positions sold today not mentioned in the article were CVS, BGS, RTX, BDX, KO & CWB




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