Why I Bought Shares in URBN (Urban Outfitters)

I subscribe to Stockcharts.com as an Extra member so that I can run my own Custom Technical Scans. I use it to quickly look for stocks that are outperforming in their category and at the time I ran my scan (December 21, 2017) URBN was performing at the 99.9-percentile of all Large-cap stocks and had been performing at that level for 5 weeks.

URBN at 99.9 large cap

URBN at 99.9 in Large-caps

 

What Happened After I Bought URBN at $35.23

Of course, after I bought, the stock went down 2 times over the next month. This often happens when buying stocks on momentum, you are buying near a short-term top, betting the trend will continue. Sometimes what happens is holders will sell into the strength, taking their profits and leaving you with the rest. However, I am a long-term trend-trader, so I position myself for long-term gains, not jumping out on short-term pains. I have a trailing Sell order active at all times and these prices did not trigger any selling, so I patiently held on to URBN.

URBN pullbacks

URBN pullbacks

 

How URBN is Performing Right Now

My patience on finding a long-term trend to ride finally paid off. After a rough January, URBN started hitting new 52-week highs in February and March. I have these email alerts set up with my online broker Questrade.

URBN feb and march alerts

URBN feb and march alerts

 

April 2018 was a fantastic month, with more than a dozen new 52-week high email alerts for URBN.

URBN april 52-week high alerts

URBN april 52-week high alerts

 

May 2018 is off to a great start too with 3 days in a row of new 52-week highs.

URBN may alerts 3 days in a row

URBN may alerts 3 days in a row

 

When To Sell URBN?

It’s hasn’t quite been 5 months and I am already up 22% in profit. It’s nice to see your portfolio increasing while you do absolutely nothing, truly hands-off passive income. Sometimes it’s a good idea not to focus on how much money you made, because in the process of writing this blog post, I am now itchy to take the money and run 🙂 But as I mentioned, I have a trailing Sell order already entered in the market. Each time the stock makes a new high price, my exit point gets a little bit higher automatically. I like the market to dictate my decision to get in or out of a stock, not my emotions. So I’m hanging on for now. The moral of the story here is slow and steady wins the race. When I bought URBN, it’s monthly ROC (Rate-of-Change) was 24% so I had pretty high expectations for its performance. So far, so good! 

 

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