Stock Market

Top Sell Indicators for Stocks

Top Sell Indicators for Stocks

We never want to be pessimistic about the economy or the stock market, or about any particular stock, yet time moves forward, and poor performers get left behind.

Economies change, go through transitions, go into recessions, and equities investors who aren’t the first to know and act on those transitions lose a lot of money. Some are so slow, they get stuck and can’t unload those equities that simply aren’t valued anymore, or whom aren’t profitable. That’s a horrible situation.

Smart investors, armed with self-directed investment services or who have professional advisors enjoy a big advantage. Are you watching the sell signals and sell ratings for the stocks you own? Do you currently own any of the big losing tech stocks listed below? Then it could be you’re a laggard and are about to suffer some financial loss. Success is for those obsessed about the mid term and long term future. They research and understand the big factors, and they listen for the sell signals.

No one wants to invest in poor performing stocks nor in poor performing companies in industries that have seen better days. But sell signals for these stocks appear for those who want to see them, or have alerts set up in their stock trading accounts. We’ll talk about those sell signals now. Knowing when to sell could be the most important knowledge an investor possesses. The tools are available.

What is a Sell Signal?

According to Investopedia:

A sell signal is a condition or measurable level at which an investor is alerted to sell a specified investment. Sell signals can be generated through a variety of methods, such as a pre-determined percentage decline in the asset’s value, a technical indicator, fundamental change in the asset, or a trailing stop-loss. Stock sell signals systems are used by all types of investors and traders, from day traders to long-term investors.

Tech Stocks: Is it Time to Dump Them?

Market Sector Watch
Screenshot courtesy of CNBC.

Biggest technology stock losers:

Top losing stocks to sell.
Top losing stocks to sell. Screenshot courtesy of Barchart.

The tech stocks in particular have enjoyed a good run in the last 18 months. But investors are selling them and moving onto stocks that will benefit from the economic recovery.

The pandemic shutdown worked well for many of them since money that would have gone to other industries (travel, restaurants, clothing, malls, transportation etc.) instead was pushed into technology companies. The tech companies didn’t do anything particularly ground breaking or innovative to deserve.

Google, Facebook, Amazon, Netflix, and Apple didn’t do much to spur great new products. They just harvested demand pouring in from “stuck consumers.”

Well, now as enter June 2021, consumers are back outside re-engaging in behaviors and product choices they had in 2019. Investors are playing down this transition in consumer and business behavior. But the summer of 2021 is unfolding fast in some US states and in Europe. The vaccines are kicking in and once the immunity levels are proven, full reopening will progress and consumers will regain their confidence.

We still have a lot of stimulus money being spent and investors realize this money is going into products, including new homes and resale houses in the housing market. The trend away from tech and into value stocks is ongoing. Of course, many self-directed investors and their advisors can’t find reason to let go of their losing stocks. They believe in the media’s and governments unrealistic pushing of eco-responsible companies and ideologies, when those industries have a flimsy backing.

Tesla is the perfect example of an overvalued tech stock that’s benefitted from ridiculous speculative investment. Review Tesla’s stock price and forecast. That was a one time thing that won’t be repeated. So there you have a strong sell signal — a huge one time surge in speculative interest during an unusual economic phase.

20  Strong Stock Sell Signals:

  1. key share holders are selling the stock
  2. price is trending down
  3. moving average is falling
  4. price volatility is increasing
  5. price/earnings ratios are falling and are well below other stocks
  6. cash flow is ailing
  7. RSI indicator shows weakness
  8. interest in the sector is waning; sector rotation happening
  9. strong competitors are entering their market (e.g., Tesla)
  10. loss of key customers or sales channels
  11. your profit level has exceeded your expectations (e.g., 25%)
  12. company changes policy such as paying out dividends
  13. price to book ratio falls below sector averages
  14. poor debt load management with rising interest rates
  15. loss of key employees
  16. change in management personnel
  17. better, stronger stocks have come to your attention
  18. government regulations announced (such as regulation of crypto, home building, or carbon emissions)
  19. company is planning to issue more stock
  20. stock market experts are advising to sell the stock
  21. the real estate market is offering higher returns — buy property

Of course, by the time your system picks up enough of these key stock sell signals, it might be too late to prevent your loss. You’ll need to assess short term movement signals too. And on the other side, you’ll need to know the buy signals and buy recommendations of those stocks that are beginning to perform well.

Best stocks to buy.
Best stocks to buy. Screenshot courtesy of Barchart.com

To stay ahead of the crowd, you can utilize a variety of predictive tools available and you can learn more about artificial intelligence stock forecasting services. The technical indicators are improving but nothing is an Oracle. The factors driving the stock market are unique, but this transition from growth stocks to value stocks has happened before. The patterns are there. You just need to pick the right stocks or ETFs.

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