fibonacci retrace 61.8% sp fall to $0.41 , page-16

Hi B2, only time will tell.... It depends on how big the retrace is, and whether the stock then advances once again to a new higher level (for me anyway as the stock I hold will get CGT discount)... at some point I'd be better off selling the lot (after tax) but there is a point where I am better off holding on too. Also depends on how many times it goes up and down and whether I'm willing to trade in and out.

I did some calcs for the particular example I chose I'd be better off selling all. However changing things in the asuumed price movements makes me better off holding :)

I assumed the following: 30,000 shares with 40% tax rate.

scenario 1:

sell all at 44c (get CGT discount my buy price was 27c) after tax profit $4080
buy back in at 35c
sell the lot at 60c after tax profit $4500
total after tax income $8580

scenario 2:
don't sell. hold through retrace to 35c sell the lot at 60c.
get full cgt discount. total profit after tax $7920

would have been better off by about $600 with scenario 1.

Lets change the second sell point to 75c.

scenario 1 ends up being $11280 profit after tax.

scenario 2 ends up being $11520 profit after tax. and the difference will get bigger if the sell price gets higher, or the retrace price is not as low.

another scenario is I sell the lot at 44c and don't buy any more at all, then the total profit is only $4080.

yet another scenario is I doggedly hold on and the price drops back to 27c I sell the lot in disgust and make nothing.

However I actually held 47000 and already sold 17,000 at 42.5c so I locked in some profit then, and I'm leaving my options open with the remaining 30,000 shares, even if I did doggedly hold through a massive retrace and then sell out at 27c I still will have made a profit of $2100 :)

So confused? I know I am ;)

Tony.