NF-Q-10-003-5-en.html
● Level 5 · IntermediateShould I Sell Immediately After a Sharp Fall?
Look beyond the percentage decline. Examine the cause, comparisons, trading volume and your time horizon.
Separate the cause into: 1) the whole market, 2) the sector, and 3) the company. Compare peers, volume, timely disclosures and financial results.
If the original reason for holding remains, continued observation may be appropriate. If information is incomplete, do not rush to average down. If the purchase thesis has broken, consider selling. Do not relabel a failed short-term trade as a “long-term investment.”
Conclusion: Investigate why the stock fell, not merely how far it fell.