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The first quarter rally has stalled in the past week while market players await the final outcome of U.S.-China trade talks, but a basket of small-cap leaders continues to post new highs. This makes sense, given the growing risk appetite following a 2018 decline that threatened to upend the decade-long bull market. However, positive small-cap seasonality will dissipate in two months, giving way to a mid-year environment that often punishes small speculative issues.
As a result, it makes sense to make hay while the sun shines, pressing positions while engaging in aggressive risk management and profit taking. This process works best when the technician identifies potential barriers before trade entry, uses trailing stops after entry and takes profits
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