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A few moments ago, with the market shrugging off the China sell-off news in the States, my Ventana Medical Systems (VMSI) hit a sale point on an appreciation target. I sold 26 shares of VMSI at a price of $51.64. This represented 1/7th of my position of 188 shares which were purchased on 4/16/04 with a cost basis of $23.47. Thus, my shares had hit an appreciation of $28.17 or 120% from purchase. I have sold shares of Ventana three times previously--at a level of 30, 60, and 90% appreciation targets--and had been waiting for the 120% appreciation level to trigger a partial sale--I am now selling 1/7th of my remaining position--and did so!
Since I am at my 'new' maximum of 20 positions (which I adjusted downward from 25 in light of my hefty margin level of about 50%), I shall be 'sitting on my hands' with the proceeds of this sale, applying it to my margin balance, and waiting until I once again dip below 20 positions before using a sale at a gain ("good news") to give me that "permission slip" to add a new position to my portfolio.
When shall I sell Ventana next? On the upside, my next four sale points shall be at 60% intervals--that is, at 180, 240, 300 and 360% appreciation levels--if they are reached. At those levels, I shall be selling 1/7th of my remaining shares. A 180% gain would mean the stock price would have to reach 2.80 x $23.47 = $65.72 before selling once again some additional shares. Since I now have 162 shares, 1/7th of that total would mean a sale of 23 shares at that higher level.
On the downside, I certainly reserve the right to sell all of my remaining shares on any fundamentally bad news announcement. On a price basis, should the shares decline to 50% of the highest targeted appreciation level, that is since I just sold at the 120% appreciation level, if shares should dip back to 60% appreciation levels or 1.60 x $23.47 = $37.55, then likewise, I shall be selling all remaining shares of that position.
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