Will Sophos rebound?

[PR999]

Hi,

 

I was just curious about peoples thoughts on Cyber security firm Sophos. Purchased in Jan 18, I've taken a bit hit recently and the downwards momentum looks slightly worrying. Is this a ride the storm or get out now situation....? :smileysad:

 

Thanks

 

[Caseynotes]

Hi .  Good question, no real reason given for the big gap down in early Feb,  http://www.cityam.com/280251/sophos-share-price-plunges-despite-solid-trading-update

 

The chart is trying to turn and today's bar is encouraging and looking to be engulfing but price still has a lot of work to do with two levels of resistance to work through and could reverse again at either. The chart is currently bearish after all.

 

The bigger test is at the arrow where there is solid resistance as well as the 100 ma to contend with.

 

Watch the daily bars, if price reverses again here I would just get out, if price takes this level (473.6) get a stop behind it as soon as possible and if price continues up think to move the stop up to behind the next resistance level as you go, they are important levels and you don't want to see them breached to the down side again.

 

If you entered in early Jan that would have been a fair dip buying entry though a stop loss just below would have been advisable.

If you bought late Jan that would have been a fair breakout entry though again a stop loss not far from the breakout level in case you were wrong would also have been advisable.

 

Sometimes it takes a couple of goes to get the entry right but if the initial stops are relatively tight then no real harm done but this one got away from you due to that unexplained gap.

 

 

 

 

 

[PR999]

Hi

 

Thank you for your analysis of the situation. Lessons learnt here about setting the stop loss early (:

These next few days will be make or break, hoping for the return to (473.6)