As you may already know, beside how to buy, how to sell is also important in stocks analysis. It will be meaningless if a stocks trader only know how to buy without know how to sell since the benefit is realized after the stocks is sold. If do not know how to sell, in my opinion, there is two possibilities will be happened which are:
- Sell too fast: the benefit may be not optimum
- Sell too late: the benefit may be lost or may lead to a big loss instead
Therefore, we as stocks trader must know how to sell – in other word, must know the right time to sell our stocks. We should not be afraid to sell our stocks when the stocks market analysis tell us to sell. If the indicators is wrong, we can always buy the stocks again after the indicators tell us to buy. Yeah, there may be a potential benefit loss during it but it is the acceptable loss to protect our money.
For more understanding about the importance of knowing how to sell in Stocks Analysis, let’s take a look into JKSE/IDX’s PGAS (Perusahaan Gas Negara) chart below:
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From above PGAS chart, we can see that there are two stocks analysis indicators combination that tell us to get ready to sell our PGAS stocks. The indicators are candlestick and volume. Candlestick show doji star after the four days up which means that the buyer power has significantly decreased. The doji star means that the power of buyer and seller is in the same level. Since after the four days uptrend, the doji star is a sign to get ready to sell.
The second stocks analysis indicator, volume has significant volume increasing which means a strong activities in the market. And as usual, a significant volume increasing always means a sign of trends reversal which in the chart above, means the reversal from up trend to down trend. Therefore we must prepare to sell our stocks or even start to sell our stocks today. In my opinion, we can get ready by installing the trailing stop to protect our benefit.
OK, after see the both stocks analysis indicators, now let’s see the limit in where the selling confirmation is happened. So far, the both indicators only tell us that there is a high possibility that PGAS up-trend may change into down-trend in this days. However it is not confirm yet – yeah, we still need a confirmation so we can sell the stocks in certainty. As usual, I look into the support line for the confirmation.
As from the chart, the support is 4000. Therefore the confirmation will be when the price is in below 4000. 4000 is also a bottom limit for the last candlestick right before the doji star. As you may know, if the price is finally in below of the candlestick of the previous days, it means a strong confirmation to sell the stocks. As mentioned before, beside try to sell the stocks, we can also install a trailing stop. Based on the stocks analysis support, we can install a trailing stop with a price that in a little below the support. As example, the trailing stop is in 3950.