When: Confirmed close > $180 with expanding MACD, RSI > 55, AND litigation clarity

Then: Full position re-engagement

SELL (60-100% trim)

• MACD histogram collapsed from 1.4 to 0.08, indicating exhausted momentum
• Volume distribution at 2.85M against 3-5M run rate confirms distribution pattern
• Third consecutive plaintiff verdict with 2,000+ plaintiffs in queue represents unpriced tail risk
• Negative tangible book value with flat revenue of $24.5B for four years
• EPS recovery story ($5.62 to $9.78) requires litigation silence, flawless cost-cut execution, and benign macro simultaneously
• Buybacks of $994M funded at $180+ while net debt climbed from $7.4B to $9.6B is financial engineering, not capital discipline
• Stock 10% above 50 SMA ($166) is a stretched signal, not a defensive one
• Macro tailwind (86% no Fed cuts, 8% recession odds) is fully priced and exhausted
• Trim of 30-50% leaves 50-70% exposed to asymmetric litigation risk
• Stop loss at $187 above entry ($184) contradicts the sell thesis by creating momentum-following re-engagement
• Recommended trim: 60-100% of existing exposure
• No covered call overlays—capping upside and selling convexity is inappropriate when tail risk is highest
• Re-entry conditions: close below $178 on rising volume (distribution complete), MACD histogram above 0.5, RSI below 50, and 2+ quarters of litigation quiet OR explicit reserve increase

→ vs aggressive: 30-50% trim is insufficient; 50-70% of position remains exposed to identified tail risks including litigation verdicts, MDL settlements, and peer-driven re-rating

→ vs aggressive: Covered calls at $185-$190 strikes sell away convexity at exactly the moment when tail risk is highest; this is yield enhancement on a position that should be exited, not managed

→ vs aggressive: Stop loss at $187 above entry price ($184) is structurally inconsistent with a sell decision—it functions as momentum-following re-engagement rather than downside protection

→ vs neutral: The bullish trend stack at 10% above 50 SMA is a stretched signal, not a defensive one; mean reversion is more likely than continuation at extremes

→ vs neutral: Forward earnings recovery from $5.62 to $9.78 is the type of story that gets repriced violently when assumptions break; HOLD framework is dangerously complacent given asymmetry

→ vs neutral: Macro tailwind (record S&P highs, 8% recession odds, 86% no Fed cuts) is fully priced with no fresh catalyst remaining

SELL 50% POSITION

• Trim 50% of position in $1.83-$1.84 zone, retaining 50% with defined risk parameters
• Set downside stop below 50 SMA at $1.66 (risk of ~9% on retained position)
• Purchase protective puts at $1.75 strike for October/December expiry, funded by trim proceeds
• Reject covered call overlay as it caps recovery near technical resistance at $1.91 with mediocre premium in compressed vol environment
• Reject conservative analyst's 60-100% trim as turning the trade into market timing requiring being right twice
• Tiered re-entry approach: 25% add-back at $1.66-$1.70 with MACD histogram > +0.5, additional 25% at $1.80+ with trend re-confirmation
• Full re-entry requires either clean litigation resolution or two quarters of no new plaintiff verdicts
• Forward P/E of 18.7x with 12% DCF upside and improving operating margin trajectory supports maintaining partial exposure
• Watson verdict at $61.5M is bounded near-term risk; reserve increase triggering earnings impact is the key catalyst to watch
• Fed pause caps multiple expansion but low recession odds and record S&P highs provide earnings multiple floor

→ vs aggressive: Covered call overlay at $1.85-$1.90 strikes essentially cap recovery precisely at the Bollinger upper band technical target of $1.91, giving away convexity on a coiled tape with compressed volatility where premium would be mediocre

→ vs aggressive: Stop loss at $1.87 (above entry price) on a trim position is structurally inconsistent with the exhaustion thesis - it signals hedging rather than conviction and creates whipsaw risk

→ vs conservative: Four simultaneous re-entry conditions (price below $1.78 on rising volume, MACD > +0.5, RSI < 50, AND 2 quarters quiet litigation) set a bar so high it may never clear - textbook recency bias locking investor out of a recovering stock at reasonable valuation

→ vs conservative: 60-100% trim to cash transforms the position into market timing requiring the manager be right both on selling AND on re-entry timing - most professional managers underperform on the latter