NTCT trade for 1/28/2016

Posted By JM on Jan 28, 2016 | 0 comments

This is a classic example of the type of parabolic stock bottom picking action we do in the MookTrader chatroom. This is just one trading style of many that we are proficient at. Today $NTCT (Netscout Systems) reported decent earnings but guided 2016 earnings lower by -5% from estimates. It fell as much as -31% and made fresh yearly lows which probably exacerbated the move down. We started bottom picking it at $20.77 (around -25% for the day) to $19.77 with confidence as the stock should have fell at most -15% for the day in our opinion. The stock p/e ratio is only 11 (not expensive at all) and thus reinforced our belief that the tank was way too excessive. Don't be afraid to add more to a losing position if your conviction tells you it's a bargain!

We sold into strength and exited the $NTCT position when we were content with our profits. Net profit on the easy bounce: +$3,792


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