Home » Lessons from a Missed Trade (+ Optimism vs. Overconfidence)

Lessons from a Missed Trade (+ Optimism vs. Overconfidence)

Hey, Ross here:

Let’s end the week for an absolutely perfect breakout trade I missed, so we can see what lessons we can learn.

Chart of the Day

This is Southern Copper (SCCO). I’ve looked at a lot of gold and silver mining stocks recently but did not see this copper miner. I wish I had.

Let’s walk through the setup.

First, the stock made a strong advance in early November, climbing from $45 to $60 in just two weeks and reclaiming its 200-day moving average (white line).

This was the first sign that SCCO was on the move.

From there, it formed a perfect base with shallowing retracements from left to right over a period of 2 months. 

Notice also how low volume was during this time. This is telling you that no one is selling, supply is not there, and the stock is becoming harder to buy. 

The breakout move came on January 4. The next 8 trading sessions saw higher highs, higher lows, and above-average volume. This is EXACTLY what I want to see in a good breakout.

The stock advanced 22% over those 8 sessions and has yet to pullback more than a couple percent from its highs.

For me, this stock is a bit too extended to buy now. It would need to form a new low-volume base to get me in. But it is a good chart to study for future trades.

Insight of the Day

Be optimistic but not overconfident.

Better-than-expected GDP numbers. A still strong labor market. And both amid falling inflation.

Could the Fed actually stick the soft landing and bring down inflation without causing a recession (and another prolonged market decline)?

I’m optimistic. But I’m NOT overconfident. If the Fed delivers a rate hike next week that’s significantly higher than the current market consensus of 25 points, it could send the markets on a downward tailspin again.

Regardless of what happens, I’m staying flexible and moving with the markets. As you’ve seen on this newsletter, there are always profitable opportunities out there no matter which way the market moves.

In fact, market turmoil can often be the best time to spot under-the-radar stocks. Everyone’s too busy paying attention to what the broader market is doing to notice them. 

And that’s your chance to pounce on them and stack up profits – a strategy that could literally 100x your starting stake. See the proof here.

Embrace the surge,

Ross Givens

Editor, Stock Surge Daily

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Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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