Hills Industries (HIL). Always have a Plan B!

hil-nov16

This chart review is an update on the fortunes of Hills Industries from September 2016.

https://technicality.me/2016/09/13/chart-alert-hills-industries-hil/

A wise mantra for investors. Always have a Plan B

Just in case company plans go astray, the trading environment changes, and heaven forbid, our decision-making is flawed.

Even longer term investors should ponder what they should do if the market turns against their position. They may be aware of the need to set a stop/loss position but will they sell when it comes to the point, or will they delay, hoping that the market will be stronger the next day.

Possible steps in a Plan B might be:

  1. Exit the existing position at a pre-determined stop/loss position or as soon thereafter as possible.
  2. Consider what to do instead with the capital. Re-enter at a stable lower price, or delay in anticipation of further price weakness until another entry signal? Or would it be wiser to choose another investment entirely.

My stop/loss position was hit when the share-price fell below support at 64 cents. Because of slippage I had to accept a 54 cent exit price.

The fall was due to the company having second thoughts about proceeding with a capital raising until more favourable trading conditions possibly in 2017. The plan is to demerge Hills Health Services, and merge it with a newly acquired healthcare leader in Lincor Solutions Inc.

I can now buy an extra half as many shares from a month ago with the sale proceeds. Regardless of the success of this merger/demerger, the company has good long-term prospects. It is trading at a support level and as the price may not slip much further, I am inclined to do this.

As always readers should consult their own stock-broker or investment adviser for investment advice appropriate for their own situation.

 



Categories: Chart Analyses, Chart Review

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