How to manage the market volatility during sector rotation? [Video]

The on-going sector rotation since Feb 2021 from growth to value now back to growth again can be confusing. Unless you adopt a buy and hold strategy with a long term horizon (3-5 years), you might find yourself keep cutting losses, break even or to see a big chunk of profit wiped out simply because the market is pretty much in a trading range and so are a lot of stocks without clear up trend. 

During choppy market, it is essential for us to adapt to the market environment. Instead of anticipating riding a sustainable up trend, we need to constantly look out for tell-tale signs for change of the market condition.

Trade Management - Early Exit

I first covered OLN on 23 May and that's for a scale in position (2nd entry as circled) while the first entry was on 26 Apr as circled. OLN is certainly a value stock and has been trending up nicely within the up channel. 

The first tell-tale sign is an increase of supply followed by a biggest bearish bar during the reaction. Next day there is no immediate follow through to the downside and provide an early exit, that could saved around 8-10% drop. 

Of course, there are also other recent trades that triggered the stop loss because of the market correction. Though it is not a happy event to experience a lost, this is only one or a few of the many trades (to come) along the trading journey with a planned and acceptable loss and we will certainly experience similar situations in the future. 

So, it is important to realize the market condition and adapt your trade management and strategy accordingly. 

Since the technology and the growth stocks are outperforming the market, watch the video below to find out these 3 bottomed out growth stocks with potential huge upside ahead.