Know the best day of the week to sell stocks and why
Okay, so everyone knows that it is practically impossible to predict what the stock market will do. If that was the case, there would be many millionaires who made their wealth on the stock market … wait, there ARE many millionaires who made their wealth on the stock market. Ok, if MORE people could predict what the stock market would do, there would be many MORE millionaires who got rich off the stock market and definitely a few more billionaires would join companies like Warren Buffet.
Now, once again, no one can predict the future. However, there are some tools investors can use to turn the odds in their favor. Nothing is guaranteed, but when the odds of something happening are in your favor, you can be sure that you have a much better chance of success. One of the tools I want to get into is knowing when to sell stocks. I also want to dig deeper and talk about specific days in general that are good for selling.
Let’s think of an example, based on recent events, you know that stock markets tend to have massive dips if something really bad happens in the world. A good example that everyone is probably familiar with would be the September 11 attacks on the World Trade Center in New York. The market fell so much that trading was stopped. The next day, the market went even lower! But nevertheless the next day after that big event, the market tried to rally (rebound) a bit. It would have been a good day to sell.
The Monday after the stock options expire (usually the third Friday of each month for most stocks) it’s a good day to sell stocks. In the third week of each month, stock options and stocks experience high levels of volatility and this is usually negative. What I mean by this is that stock prices tend to drop significantly during the third week of every month.
If stock prices experience big drops, the day after that rest day Usually it will be a rally as short sellers will try to hedge their positions and other investors will see that the stocks are oversold. Stocks NEVER go down and they never go up. There are always days down and days up between a stock’s move to higher highs or lower lows.
The first trading day after a holiday. Trading is usually light before a weekend or before a holiday, as most brokers take vacations. Trading tends to pick up once brokers and large traders return from their vacations.
Tea days when there is good news about a company like profit or a great new product. Positive earnings reports on a stock are good days to sell a stock. These types of news tend to drive up the price of stocks, and these are the perfect days to sell.
The bottom line is that you must learn to identify the events that would cause a stock to go up in price. Lastly, as a general rule of thumb, NEVER buy on a rising day, always look to profit on rising days.
