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Booking Some Gains in an Outperformer

RF Industries has surged more than 30% since bottoming on May 11.
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After you receive this Alert, we will sell 460 shares of RF Industries (RFIL) at or near $8.05. Following the trade, RFIL will represent roughly 3.0% of the portfolio. Last week, we did some prudent trimming of our BlackBerry (BB) position and this morning we are doing the same with RF Industries following the stock’s more than 30% surge since bottoming out on May 11. By comparison, over the last month, the Nasdaq Composite Index climbed 4.3% and the Russell 2000 rose 4.8% -- clearly RFIL shares have been a strong outperformer.

https://www.thestreet.com/k/su/15674579/selling-more-of-a-high-flyer.html

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We certainly understand the “why” behind that surge given the 5G tailwind at RF Industries’ back as well as new customers wins that it has reported in recent weeks. However, we continue to hear about supply chain problems as well as companies having a difficult time attracting employees. While we are bullish on the 5G opportunities in general and for RF Industries, much like we did last week with BlackBerry, we are going to take the prudent route and book some of the gains recorded by RFIL over the last month.

As one can see from the chart, upon entering overbought territory, RFIL shares have a history of giving back some of their gains. We’d rather be opportunistic than kick ourselves in the days to come.

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