Neurometrix: When They Zig, It's Time to Zag (NURO)

Don't get me wrong - it's fun to be right. There's such a thing as being too right (or at least too right, too fast) though, and when that happens, the smart thing to do is, well do something about it. Case in point? I was right yesterday about Neurometrix Inc. (NASDAQ:NURO). I suggested the stock was already in the midst of a breakout, and NURO was poised to soar. I didn't count on this morning's big jump and subsequent gap, however, so now that my risk of continuing to hold it is as big as my potential reward from here, I and anybody else who followed my lead has a tough decision to make... though I've already made mine.

The chart of NURO below says it all. Shares broke through a ton of resistance in early November, so it was pretty much free to roam however and wherever it wanted. That doesn't mean Neurometrix can bounce around as it pleases without consequence though. Between the current gain of 17% for the day and the gap the stock made at the open, odds are the so-called "smart money" is using the strength to get out of the trade with a nice gain - at least in the short run.

None of this is to say about Neurometrix Inc. is a bad company. None of this is to say NURO is a bad stock either; I'll likely buy it again after a decent dip and after the gap is filled in. As they say, though, timing is everything. That's true, coming and going.

As for what sparked today's sudden, brilliant move from Neurometrix, that's the curious part. While there was news, it wasn't like the news was a game-changer for the company, and it's not as if the news came as any real surprise. The company inked a deal with a distributor in China for its NC-Stat device. While any open door is a good one at this point, there's not a lot of clarity on how much revenue this deal might produce. Doesn't matter. It's a small sign of a much bigger wave of momentum NURO is building, and the market is quickly - perhaps a little too quickly - falling in love with the stock.

It's not a bad choice of stock to fall in love with either, mind you. But, just for the record, I'm mentally selling the stock while it's so hot, and planning on stepping into it again once the dust settles.

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