Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: [CANSLIM] PECS vs MCAF Post Analysis
Date: Thu, 17 Jan 2002 16:55:19 -0600
Previous Article (by Date): Re: AW: [CANSLIM] MCAF "Tim Fisher"
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This is a multi-part message in MIME format. - ------=_NextPart_000_00B8_01C19F77.BEB14DE0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Post analysis of 2 recent trades, warts and all: Most important lesson learned: Never lose focus--even a day can make the = difference between excellent vs decent gains. PECS-Good buy, Decent Sell - -Macrotheme: Good quality services companies do not have excess = capacity/inventory to bog them down during economic recovery. "New" = names during early bull are most likely to do better than "old = favorites" - -Due diligence highlights: Company competes with ACN and CSC for = government contracts. Small & nimble. Successful. Developing JABS-joint = automated booking system for tracking criminals across agencies. Long = history of contract wins. - -Stalked the trade for: 1 month - -Purchased: 11/14 on breakout @ $27.50 During the trade and Exit: --11/20/01--Stock reverses and closes below low of previous day on = high volume. Red Flag. --11/27-11/28/01--2 days of high volume without further price = progress. 2nd Red Flag. Depending on market strength I will sometimes = take a little off the table. I give this one a chance, but it's up to 2 = red flags so is now on high alert. --12/5/01--You may remember that shortly after this I posted the = "Rubberband Sell Rule" (RSR) spreadsheet and calculations to the list. = You can see why it was on my mind. I did the calculation intraday on = 12/5 and it flashed a sell warning. Tail down on close. 3rd red flag. = Market is starting to show signs of stress. I am already taking profits = on other positions and moving to cash. I give this stock one last chance = to see what it will do. I have the sell order ready.=20 --12/6-12/8/01--3 down days. Final red flag. I wait to sell into the = next bounce.=20 --12/9/01--Sell at avg price $34.93. Gain: 27%. Lessons learned: 3 red warning flags =3D sell. Good focus got me out = reasonably close to the top. MCAF-Great buy, Lousy Sell Macrotheme: Good quality services companies do not have excess = capacity/inventory to bog them down during economic recovery. "New" = names during early bull are most likely to do better than "old = favorites" Personal data security in interconnected world. Due diligence highlights: Tie in to Windows XP release. Subscription = based revenue stream with auto renewal option. 2 quarters of newly = positive EPS numbers. High growth. New IPO--spinoff from NETA. Stalked the trade for: 5 months Purchased: 10/11/01 on gap open breakout on earnings news. Offered up a = $0.21 sacrifice to the gap gods to get in. During the trade & Exit(s): --10/30/01--posted 2 days of little/no movement on high volume. = Market still getting its legs after 9/28 FTD. Took 20% off the table at = $22.16 (Gain: 22.4%) --11/16 & 11/17/01--new highs on low volume. Red flag. --12/5/01--breaks out of consolidation zone on high volume. Good = sign. --12/18-12/19/01--new highs on so-so volume. High alert. RSR calc = shows it's extended and could correct 15-25%. That would put it at 50dMA = and intermediate term support. Hold. --12/31/01--reversal day with a tail on so-so volume. Red flag. --1/9/02--reversal day with tail on high volume. Counts as = distribution day. RSR calc flashing screaming red signals. I get busy = and forget to look at end of day charts for a couple of days. Lost = focus. --1/11/02--another tail on high volume. Normally with this many red = flags, I would take another 50% off the table. Was busy and didn't check = charts end of day. --1/14/02--gap down. I know earnings announcement is just around the = corner. This is a BIG RED FLAG and I normally sell into a bounce after = this happens. Was still distracted on other things and wasn't paying = attention. --1/15/02--one more bounce day available. I have a lengthy = conversation with a friend about MCAF. He reminds me of my gap down on = impending earnings news sell rule. I take note and decide to give it a = chance to show support at 50dMA. Read---I am breaking my sell rules = here. --1/16/02--Market posts 4th distribution day in 2 weeks. I always = take money off the table when this happens, regardless of technical = condition of my holdings. I make the decision to close out my remaining = MCAF position the next morning. --1/16/02--MCAF announces earnings after hours. Beats estimates and = guides future estimates higher. Stock is up in after hours trade. I like = to sell into strength, so am glad that I will have a bounce to sell into = the next morning. --1/17/02--I am watching MCAF. Gap up on open. Price starts to fade, = I get ready to hit the sell button...Honest to goodness truth...the = phone rings. During the conversation I am distracted (no focus again) = and we begin to talk about other things. I get a cup of coffee. I come = back to my desk ready to place the sell order and....yes....the stock = has plunged into oblivion...I wait a bit to see if I can get one last = bounce which never comes....I sell at $24.45. Gain: 35.1%. Opportunity = cost: $12.23/share if I'd sold on the last BIG RED FLAG. Possible gain = on last part of position would have been: 102.7%.=20 Lesson learned--There is NEVER an excuse for losing focus. If Jeff calls = when I've got my finger on the sell button, ask him to hold on a minute. Note--some of you have asked why I don't use a trailing stop. I just = don't like to use hard trailing stops, a personal preference. I use my = sell rules to get me out of a stock (of course, when I'm paying = attention!) When the stock is showing red flags I will set a = "catastrophic" stop loss. This is set just below the low of the last = area of consolidation. MCAF was set at 19.87. Charts will be posted soon at: http://WallStreet-LLC.com/pub/MCAF-PostAnal011702.jpg http://WallStreet-LLC.com/pub/PECS-PostAnal011702.jpg Katherine - ------=_NextPart_000_00B8_01C19F77.BEB14DE0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 5.50.4611.1300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>Post analysis of 2 recent trades, warts and all:</DIV> <DIV> </DIV> <DIV><STRONG>Most important lesson learned</STRONG>: <EM>Never lose = focus--even=20 a day can make the difference between excellent vs decent = gains.</EM></DIV> <DIV><EM></EM> </DIV> <DIV><STRONG>PECS-Good buy, Decent Sell</STRONG></DIV> <DIV><EM>-Macrotheme</EM>: Good quality services companies do not have = excess=20 capacity/inventory to bog them down during economic recovery. "New" = names during=20 early bull are most likely to do better than "old favorites"</DIV> <DIV><EM>-Due diligence highlights:</EM> Company competes with ACN and = CSC for=20 government contracts. Small & nimble. Successful. Developing = JABS-joint=20 automated booking system for tracking criminals across agencies. Long = history of=20 contract wins.</DIV> <DIV>-<EM>Stalked the trade for:</EM> 1 month</DIV> <DIV>-<EM>Purchased:</EM> 11/14 on breakout @ $27.50</DIV> <DIV><EM>During the trade and Exit:</EM></DIV> <DIV> --11/20/01--Stock reverses and closes below low of = previous=20 day on high volume. Red Flag.</DIV> <DIV> --11/27-11/28/01--2 days of high volume without = further price=20 progress. 2nd Red Flag. Depending on market strength I will sometimes = take a=20 little off the table. I give this one a chance, but it's up to 2 red = flags so is=20 now on high alert.</DIV> <DIV> --12/5/01--You may remember that shortly after this I = posted=20 the "Rubberband Sell Rule" (RSR) spreadsheet and calculations to the = list. You=20 can see why it was on my mind. I did the calculation intraday on 12/5 = and it=20 flashed a sell warning. Tail down on close. 3rd red flag. Market is = starting to=20 show signs of stress. I am already taking profits on other positions and = moving=20 to cash. I give this stock one last chance to see what it will do. I = have the=20 sell order ready. </DIV> <DIV> --12/6-12/8/01--3 down days. Final red flag. I wait to = sell=20 into the next bounce. </DIV> <DIV> --12/9/01--Sell at avg price $34.93. Gain: = <EM>27%</EM>.</DIV> <DIV><EM>Lessons learned:</EM> 3 red warning flags =3D sell. Good focus = got me out=20 reasonably close to the top.</DIV> <DIV> </DIV> <DIV> </DIV> <DIV><STRONG>MCAF-Great buy, Lousy Sell</STRONG></DIV> <DIV> <DIV><EM>Macrotheme</EM>: Good quality services companies do not have = excess=20 capacity/inventory to bog them down during economic recovery. "New" = names during=20 early bull are most likely to do better than "old favorites" Personal = data=20 security in interconnected world.</DIV> <DIV><EM>Due diligence highlights</EM>: Tie in to Windows XP release.=20 Subscription based revenue stream with auto renewal option. 2 quarters = of newly=20 positive EPS numbers. High growth. New IPO--spinoff from NETA.</DIV> <DIV><EM>Stalked the trade for</EM>: 5 months</DIV> <DIV><EM>Purchased</EM>: 10/11/01 on gap open breakout on earnings news. = Offered=20 up a $0.21 sacrifice to the gap gods to get in.</DIV> <DIV><EM>During the trade & Exit(s):</EM></DIV> <DIV> --10/30/01--posted 2 days of little/no movement on = high=20 volume. Market still getting its legs after 9/28 FTD. Took 20% off the = table at=20 $22.16 (Gain: <EM>22.4%</EM>)</DIV> <DIV> --11/16 & 11/17/01--new highs on low volume. Red=20 flag.</DIV> <DIV> --12/5/01--breaks out of consolidation zone on high = volume.=20 Good sign.</DIV> <DIV> --12/18-12/19/01--new highs on so-so volume. High = alert. RSR=20 calc shows it's extended and could correct 15-25%. That would put it at = 50dMA=20 and intermediate term support. Hold.</DIV> <DIV> --12/31/01--reversal day with a tail on so-so volume. = Red=20 flag.</DIV> <DIV> --1/9/02--reversal day with tail on high volume. = Counts as=20 distribution day. RSR calc flashing screaming red signals. I get busy = and forget=20 to look at end of day charts for a couple of days. Lost focus.</DIV> <DIV> --1/11/02--another tail on high volume. Normally with = this=20 many red flags, I would take another 50% off the table. Was busy and = didn't=20 check charts end of day.</DIV> <DIV> --1/14/02--gap down. I know earnings announcement is = just=20 around the corner. This is a BIG RED FLAG and I normally sell into a = bounce=20 after this happens. Was still distracted on other things and wasn't = paying=20 attention.</DIV> <DIV> --1/15/02--one more bounce day available. I have a = lengthy=20 conversation with a friend about MCAF. He reminds me of my gap down on = impending=20 earnings news sell rule. I take note and decide to give it a chance to = show=20 support at 50dMA. Read---I am breaking my sell rules here.</DIV> <DIV> --1/16/02--Market posts 4th distribution day in 2 = weeks. I=20 always take money off the table when this happens, regardless of = technical=20 condition of my holdings. I make the decision to close out my remaining = MCAF=20 position the next morning.</DIV> <DIV> --1/16/02--MCAF announces earnings after hours. Beats=20 estimates and guides future estimates higher. Stock is up in after hours = trade.=20 I like to sell into strength, so am glad that I will have a bounce to = sell into=20 the next morning.</DIV> <DIV> --1/17/02--I am watching MCAF. Gap up on open. Price = starts to=20 fade, I get ready to hit the sell button...Honest to goodness = truth...the phone=20 rings. During the conversation I am distracted (no focus again) and we = begin to=20 talk about other things. I get a cup of coffee. I come back to my desk = ready to=20 place the sell order and....yes....the stock has plunged into = oblivion...I wait=20 a bit to see if I can get one last bounce which never comes....I sell at = $24.45.=20 Gain: <EM>35.1%</EM>. Opportunity cost: $12.23/share if I'd sold on the = last BIG=20 RED FLAG. Possible gain on last part of position would have been:=20 <EM>102.7%</EM>. </DIV> <DIV><EM></EM> </DIV> <DIV><EM>Lesson learned--</EM>There is NEVER an excuse for = losing focus. If=20 Jeff calls when I've got my finger on the sell button, ask him to hold = on a=20 minute.</DIV> <DIV> </DIV> <DIV>Note--some of you have asked why I don't use a trailing stop. I = just don't=20 like to use hard trailing stops, a personal preference. I use my = sell rules=20 to get me out of a stock (of course, when I'm paying = attention!) When the=20 stock is showing red flags I will set a "catastrophic" stop loss. This = is set=20 just below the low of the last area of consolidation. MCAF was set at=20 19.87.</DIV> <DIV> </DIV> <DIV>Charts will be posted soon at:</DIV> <DIV><A=20 href=3D"http://WallStreet-LLC.com/pub/MCAF-PostAnal011702.jpg">http://Wal= lStreet-LLC.com/pub/MCAF-PostAnal011702.jpg</A></DIV> <DIV><A=20 href=3D"http://WallStreet-LLC.com/pub/PECS-PostAnal011702.jpg">http://Wal= lStreet-LLC.com/pub/PECS-PostAnal011702.jpg</A></DIV> <DIV> </DIV> <DIV> </DIV> <DIV>Katherine</DIV> <DIV> </DIV> <DIV> </DIV></DIV></BODY></HTML> - ------=_NextPart_000_00B8_01C19F77.BEB14DE0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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