Overkill

Barring a buyout (with a hefty premium) or some type of change which actually works, stocks like FIT GPRO, even FEYE, are good reminders that some things in this world are broken and are not meant to be fixed--Leaving them be is often the best play.

The amount of pure destruction of capital and confidence sustained by bottom-picking bulls in these names, not to mention the buy-and-holders, will almost assuredly mean a long, tedious healing process for these charts, if that day, in fact, ever comes. 

Back in late-2014, for example, GPRO was not far from $100 as we closed in on Christmas. But that would be as good as it got for longs, as the stock actually printed single digits this morning after the latest earnings swoon. 

Old-fashioned trading tools like stop-loss discipline, position sizing, and an ability to cast your ego aside to admit you are wrong on a trade are concepts we discuss frequently for Members in order to avoid these types of devastating drawdowns

Simple math, for instance, dictates that if you take a 50% drawdown on a position, you are going to need to double-up on that money just to break even. 

So while the selling in FIT GPRO FEYE and others may seem like overkill this week, it drives home one of the most important concepts in trading and indeed all forms of speculation.