Rule One Investing Blog

On December 4th, 2009 I sold my 4 shares of Apple (AAPL). I was watching the indicators ever since it broke through the $200 threshold. I had this as my target price for a while and have been watching and waiting. Then on December 2nd it started to go down and I watched closely to ensure I wasn’t getting out too soon or too late.

The indicators I used to get out were the 20 day moving average, 50 day moving average and the MACD. I also was watching two versions of the charts the 3-month view and the 1-yr view. I’ve noticed that they provide different information and I like to have as much information as possible. I saw the 20 day moving average break through the price around November 30th, then the 50 day on Dec 3rd / 4th. The MACD was trending downward and hadn’t quite crossed but was about to. Anyway, I sold at $193.

Bought 4 shares @ 129.10 = $516.40 (February 29th, 2008)

Sold 4 shares @ $193.00 = $772

Profit = $255.60

Looking back at the trends over the past 1.5 years (chart below) I noticed that I should have sold my stocks original in July 08. Then I should have waited until March 09 to buy again. This would have been a correct Rule 1 trade, however, I wasn’t following things closely enough and missed out. This teaches a good lesson that watching the stocks does only take 15 minutes per day and you can profit greatly if you know what you’re looking for.

I am now in search of another set of companies to purchase. However, as my Rule 1 knowledge is a bit foggy I am going to re-read the book and refresh my knowledge so that I’m ready for my next set of winning trades!