Sell Alert: Dick’s Sporting Goods (DKS)

By Jim Pearce • November 17, 2017

TRADE INSTRUCTIONS
Date: November 17, 2017
Name: Dick’s Sporting Goods
Symbol: DKS
Type: Close
Limit: Sell at market

TRADE RATIONALE
For reasons not yet entirely clear, DKS has shot up more than 15% over the past few days. Yes, the company reported solid third-quarter earnings at the beginning of this week but it also guided lower for 2018 revenue which normally would have sent the stock reeling.

I realize there is still a lot of time left in my target hold period for DKS, but with an annualized gain well in excess of 200% already baked into this trade I’m closing it out before next week’s “Black Friday” shopping extravaganza. Retail stocks can be particularly volatile around that event, and I’d hate to give away our big gain if next weekend’s sales figure for DKS is less than expected.

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Roger Dehring

11/17/17 ‐ 10:57am ET November 17, 2017 at 10:57am ET

Not certain whether my DKS trade was yours or Linda’s.

Anyway, closed my MAR 24/28 calls earlier this morning for a nice +80% profit.

roger

James Cook

11/17/17 ‐ 11:30am ET November 17, 2017 at 11:30am ET

I WAS IN DICKS FOR 3 DAYS FOR A 25% PROFIT.

WHAT IS YOUR FORMULA FOR CALCULATING APR?

THANKS

Jim Pearce

11/17/17 ‐ 3:06pm ET November 17, 2017 at 3:06pm ET

Here is a link to a calculator to for it: http://www.investinganswers.com/calculators/return/compound-annual-growth-rate-cagr-calculator-1262. In your case, it produces a pretty crazy number given how short your holding period was.

BWAT

11/17/17 ‐ 4:17pm ET November 17, 2017 at 4:17pm ET

Hi Jim,
I’m new to SW and was wanting to know if this MIT system will be able to recognize when a correction is going to take place? I am invested but still thinking about the other shoe dropping!
Thanks

Jim Pearce

11/20/17 ‐ 10:12am ET November 20, 2017 at 10:12am ET

The system is not designed to identify an overall correction in the stock market, it only looks for pricing anomalies among stocks based on specific metrics. However, I have noticed over the past fifteen years of its track record that it tends to underperform the overall market during months leading up to a correction (which makes sense, since that’s usually when stocks start trading more on subjective perception and less on objective facts). Lately, the success rate of the model has been closer to 50% which suggests to me that we may be nearing a correction so I have been careful in setting stop loss and limit prices.

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