Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] PECS & "Rubberband Sell Rule"
Date: Mon, 10 Dec 2001 05:23:11 -0600
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Hi Chris,
I agree with you on the vague nature of WON's sell rule and it's the =
reason that I was happy to have found these additional criteria. A stock =
could easily rise 70% above the 200dMA, but if the price behaves as you =
would expect, you'll see mostly accumulation days and the 200dMA will =
rise with the price. That would be a good stock in my book!
I keep 3 kinds of records related to buying and selling. First, I have a =
buy and a sell checklist. All the appropriate items have to be checked =
before I'll buy. When a sell rule is hit, out it goes. (The rubberband =
rule, along with a couple of others are what I call "warning" sell =
rules. I do not sell unconditionally on this trigger alone.) Second, I =
make a notation in my trading journal that will state my general reason =
for buying/selling along with other general observations about what is =
going on that might have affected the decision. What I'm trying to do is =
keep a record of my "mental state" when buying/selling. (The journal =
itself contains more than buy/sell info.) Third, a printout of the chart =
on the buy and sell date. Here I'll highlight all the appropriate =
technicals, making note of industry RS and other things that don't show =
on the DGO chart. The buy and sell charts get stapled together and put =
into a trading journal. All of these things allow me to go back on a =
regular basis and find weaknesses. It is through these kinds of reviews =
that I am able to enhance a strategy, find errors or identify my hot =
buttons. Believe me, there's plenty of those to contend with!=20
Katherine
----- Original Message -----=20
From: Chris Dempsey=20
To: canslim@lists.xmission.com=20
Sent: Sunday, December 09, 2001 11:49 PM
Subject: RE: [CANSLIM] PECS & "Rubberband Sell Rule"
Katherine,
Thanks for the idea. Sell rule 34 has always bothered me. "Some stocks =
can be sold when they are 70 to 100% above their 200-day. This in many =
instances seemed to soon. This looks like it will help determine which =
stocks. Have you done any analysis of you trades to determine the =
accuracy of this formula.
What records do you keep when you buy and sell a stock?
Chris
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Friday, December 07, 2001 9:42 AM
To: CANSLIM List Posting
Subject: [CANSLIM] PECS
Just so you guys don't blame this one on the "IBD curse"...
Here's a good example of the "Rubberband Sell Rule" in action:
PECS B/O on 11/14.
Rubberband Sell Rule:
If all three of these criteria are met, be prepared to sell, as the =
price
can fall 15-25%:
(1) >125% above the recent base low AND
(2) >70% above the 200 day MA AND
(3) >25% above the 50 day MA.
For PECS intraday 12/5/01 when P was $40.12:
(1) recent base low $12.50, +221%
(2) 200dMA $19.23, +108%
(3) 50dMA $24.51, +64%.
Based on that, on 12/5 price, your choices were:=20
(1) Sell all or portion of position
(2) Intend to buy back as it returns to intermediate term trend
(3) Move on to another position
12/6 was a distribution day, the first in its advance.
This morning an analyst downgraded to hold based on valuation, stock =
gapped down on open.
So, depending on your choice, the next rule to kick in is the WON =
rule for stocks moving up >=3D20% within 8 weeks after breakout:
If a stock does this, hold on through the first correction.
If you make this choice, you then just have to watch that the IT =
trend is not violated as it makes its correction.
If other sell rules kick in, out it goes.
Katherine
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<BODY bgColor=3D#ffffff>
<DIV><FONT face=3DArial size=3D2>Hi Chris,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I agree with you on the vague nature of =
WON's sell=20
rule and it's the reason that I was happy to have found these additional =
criteria. A stock could easily rise 70% above the 200dMA, but if the =
price=20
behaves as you would expect, you'll see mostly accumulation days and the =
200dMA=20
will rise with the price. That would be a good stock in my =
book!</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I keep 3 kinds of records related =
to buying=20
and selling. First, I have a buy and a sell checklist. All the =
appropriate items=20
have to be checked before I'll buy. When a sell rule is hit, out it =
goes. (The=20
rubberband rule, along with a couple of others are what I call "warning" =
sell=20
rules. I do not sell unconditionally on this trigger alone.) Second, I =
make a=20
notation in my trading journal that will state my general reason for=20
buying/selling along with other general observations about what is going =
on that=20
might have affected the decision. What I'm trying to do is keep a record =
of my=20
"mental state" when buying/selling. (The journal itself =
contains more than=20
buy/sell info.) Third, a printout of the chart on the buy and sell =
date.=20
Here I'll highlight all the appropriate technicals, making note of =
industry RS=20
and other things that don't show on the DGO chart. The buy and sell =
charts=20
get stapled together and put into a trading journal. All of these things =
allow=20
me to go back on a regular basis and find weaknesses. It is through =
these kinds=20
of reviews that I am able to enhance a strategy, find errors or =
identify my=20
hot buttons. Believe me, there's plenty of those to contend with! =
</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Katherine</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dcdempsey@houston.oilfield.slb.com=20
href=3D"mailto:cdempsey@houston.oilfield.slb.com">Chris Dempsey</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Sunday, December 09, 2001 =
11:49=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] PECS =
&=20
"Rubberband Sell Rule"</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D737562605-10122001>Katherine,</SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D737562605-10122001></SPAN></FONT> </DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D737562605-10122001>Thanks for the idea. Sell rule 34 has =
always bothered=20
me. "Some stocks can be sold when they are 70 to 100% above their =
200-day.=20
This in many instances seemed to soon. This looks like it will help =
determine=20
which stocks. Have you done any analysis of you trades to determine =
the=20
accuracy of this formula.</SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D737562605-10122001></SPAN></FONT> </DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN =
class=3D737562605-10122001>What=20
records do you keep when you buy and sell a stock?</SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D737562605-10122001></SPAN></FONT> </DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D737562605-10122001>Chris</SPAN></FONT></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of =
</B>Katherine=20
Malm<BR><B>Sent:</B> Friday, December 07, 2001 9:42 AM<BR><B>To:</B> =
CANSLIM=20
List Posting<BR><B>Subject:</B> [CANSLIM] PECS<BR><BR></FONT></DIV>
<DIV><FONT face=3DArial size=3D2>Just so you guys don't blame this =
one on the=20
"IBD curse"...</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Here's a good example of the =
"Rubberband Sell=20
Rule" in action:</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>PECS B/O on 11/14.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Rubberband Sell Rule:</FONT></DIV>
<DIV>If all three of these criteria are met, be prepared to sell, as =
the=20
price<BR>can fall 15-25%:<BR>(1) >125% above the recent base low=20
AND<BR>(2) >70% above the 200 day MA AND<BR>(3) >25% above the =
50 day=20
MA.<BR></DIV>
<DIV><FONT face=3DArial size=3D2>For PECS intraday 12/5/01 when P =
was=20
$40.12:</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>(1) recent base low $12.50, =
+221%</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>(2) 200dMA $19.23, =
+108%</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>(3) 50dMA $24.51, =
+64%.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Based on that, on 12/5 price, your =
choices=20
were:=20
<DIV><FONT face=3DArial size=3D2>(1) Sell all or portion of=20
position</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>(2) Intend to buy back as it =
returns to=20
intermediate term trend</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>(3) Move on to another=20
position</FONT></DIV></FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>12/6 was a distribution day, the =
first in its=20
advance.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>This morning an analyst downgraded =
to hold=20
based on valuation, stock gapped down on open.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>So, depending on your choice, the =
next rule to=20
kick in is the WON rule for stocks moving up >=3D20% within 8 =
weeks after=20
breakout:</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>If a stock does this, hold on =
through the first=20
correction.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>If you make this choice, you then =
just have to=20
watch that the IT trend is not violated as it makes its=20
correction.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>If other sell rules kick in, out it =
goes.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial=20
size=3D2>Katherine</FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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