Go to Jeff Salisbury LWGate Home Page.From: Andreas Himmelreich <judgejimmy@web.de>
Subject: AW: [CANSLIM] PECS vs MCAF Post Analysis
Date: Fri, 18 Jan 2002 02:40:39 +0100
Next Article (by Author): [CANSLIM] (Canslim) DYII-PECS-MCAF Post Analysis "Chris McShaffey"
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Hi Katherine, That is excellent. I have a folder in Outlook that is called "Strategy". Every posting that will influence my strategy in a way, I store there. There is a lot of stuff in there from you. THANK YOU !!! Andreas > -----Ursprungliche Nachricht----- > Von: Katherine Malm [SMTP:kmalm@earthlink.net] > Gesendet am: Thursday, January 17, 2002 11:55 PM > An: canslim@lists.xmission.com > Betreff: [CANSLIM] PECS vs MCAF Post Analysis > > 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. > --12/6-12/8/01--3 down days. Final red flag. I wait to sell into the next bounce. > --12/9/01--Sell at avg price $34.93. Gain: 27%. > Lessons learned: 3 red warning flags = 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%. > > 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 > > > << Datei: ATT00017.htm >> - - - -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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