Risk and selling · Rebuilt with the Oct 13, 2026 close
When to sell: what an exit rule would have done
A Buy is not a plan for getting out. What happened after thousands of sharp drops in the stocks we cover, and the three exit rules your signal now reads.
Most trading rules, and most of what people read about stocks, are about when to buy. The harder call is when to get out, and a Buy signal doesn't make it for you. This piece looks at what actually happened after sharp drops in the 347 stocks Be The Puck covers, and at the exit rules your signal now carries.
After a 10% week
Since 2006 the covered stocks had 9,316 weeks in which they fell 10% or more. Here is how each kind did against its market (the S&P 500, or the TSX for Canadian names) afterwards:
| The drop | Times | Beat the market, 3 months | Beat it, 1 year | Median vs market, 1 year | Fell further in 3 months |
|---|---|---|---|---|---|
| Every 10%+ weekly drop | 9,316 | 53% | 55% | +7% | 42% |
| The market fell less than 3% that week | 6,071 | 50% | 50% | +0% | 46% |
| The market fell 3% or more too | 3,245 | 60% | 64% | +17% | 34% |
| After the stock had more than doubled in a year | 1,062 | 51% | 45% | −6% | 43% |
| … and it was still above its 200-day average | 859 | 52% | 47% | −4% | 42% |
| … and the drop took it below its 200-day average | 203 | 44% | 36% | −19% | 51% |
Three things stand out.
- A sharp drop on its own isn't a sell signal. Taken together, stocks did about as well as their market afterwards, and better after market-wide crashes, because markets bounced back from 2008, 2020 and 2022. That flatters the drop: the stocks we test today are the ones that survived, and the ones that went to zero after a 10% week aren't in the list.
- A drop of its own, in a calm market, was a coin flip afterwards: the market didn't hand it back.
- A drop after a big run that broke the trend was the warning. When a stock that had more than doubled in a year fell 10% in a week and finished below its 200-day average, it beat its market over the next year only 36% of the time, lagging by a median 19%. While the trend held, the same drop was close to a coin flip.
The exit rules in your signal
- Off the high (new): points fall as the price falls below its 1-year high, to none at 30% below. Tested monthly since 2011, stocks it scored low beat their market over the next year 53% of the time, against 59% for those near their highs.
- Trend: the price against its 200-day average, ranked across every covered stock (+4.2 pts over a year). It's the line the table above says mattered most after a big run.
- The plays' own exits. Every play that holds a stock has a price where it gets out, on each stock page under "Next move", and every stock brief lists the nearest one.
Both price rules are in the new standard weights, so a stock that keeps falling now loses points whatever its analysts say. None of them can tell you whether a drop is the start of something or noise; they tell you how drops like it have played out.
The latest week's 10% drops
| Stock | The week | From 1-year high | 1 year before | 200-day average |
|---|---|---|---|---|
| OPTTOcean Power Technologies | −15.3% | −88% | +104% | above |
| LITELumentum | −10.5% | −13% | +658% | above |
| QUTXQuantum X | −10.0% | −69% | −45% | below |
Weeks end on Friday; the latest week may be partial. Each stock page has the full picture.
This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision. Be The Puck reports what published rules and public data say; it doesn't know your goals, taxes or timeline.