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12% gain on a 7-day hold – Sturm Ruger ($RGR)

January 27, 2012

Here is a quick review of a recent breakout trade in Sturm Ruger (RGR), which we recently bought and sold in the MTG Stalk Sheet swing trading newsletter.

The entry point is detailed on the chart below:

Prior to our entry, RGR was consolidating in a tight range above the 20-day EMA, with the 20-day EMA above the 50-day MA. With all three main moving averages trending higher (200-day MA is in orange), we had a defintive uptrend in place prior to our entry. The tight price action from Dec. 22 to Jan. 4 established a low risk entry point on a breakout 34.70, which is what triggered our entry price on Jan. 5.

Here is a snapshot of the subsequent price action after our entry:

We decided to take profits off the table in RGR by selling into strength of the 8% up day on Jan. 13, locking in a 12% gain from a seven day hold.

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