I've learnt from personal experience that it never pays to buy...

I've learnt from personal experience that it never pays to buy stocks that gap down in price. A stock like NHC has been significantly re-rated by the market. We can also infer that institutional fund manager support has now weakened.

Gaps occur after news releases, or broker downgrades. It is more common for a strong stage 2 stock to gap up on news. Conversely, with weak stage 4 stocks trading below a 200-day moving average, price will more likely gap down.

The key to successful stock market investing is to have no emotional attachment to any company. This enables no quibbling when a trailing stop loss exit needs to be implemented. There are too many strongly trending stage 2 companies to bother over having to exit one stock. I maintain a watchlist of strong stocks as potential buys for immediate use just in case one of my portfolio stocks like NHC fails me badly.

An NHC exit just below $4 is excellent. In hindsight I should have acted on the first day plunge, but instead waited until the next day.

The two technical stock advisory firms I am subscribed to have exited NHC.

If anyone needs to know my current portfolio, it is included in the My Watchlist page at:

https://hotcopper.com.au/account/stage-2-uptrend.395760/