Re: [CANSLIM] DFXI again

From: "J. Lobatto" <jlobatto@nyc.rr.com>
Subject: Re: [CANSLIM] DFXI again
Date: Fri, 19 Apr 2002 12:30:43 -0400

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Top of Thread: RE: [CANSLIM] DFXI again "Erik_Harris3745"
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Your experience is very typical of how the market has been treating
CANSLIMers for quite a while. I think it's partially due to the fact that
there are not that many high EPS and RS stocks forming classic cup and
handle bases. When one does appear (like DFXI) and breaks out as DFXI did on
3/28, it's a feeding frenzy and I strongly suspect that "they" are aware of
this and try to immediately drop the stock to shake out all the stop loss
orders put in by CANSLIMers. I bought DFXI myself on 3/28 and when it headed
down I said to myself "here we go again". This time I decided to hang tough
and didn't sell after the 8% drop as I've seen this happen so often lately.
Sure enough, it came right back and I'm sitting on a profit now. I realize
that this kind of behavior however can lead to disaster and wouldn't
recommend it. My hope is that down the road there will be many more stocks
breaking out and everyone will not be piling into the 2 or 3 daily breakouts
we see now.

Jon
- ----- Original Message -----
From: "Dave Rubin" <daverubin@yahoo.com>
To: <canslim@lists.xmission.com>
Sent: Friday, April 19, 2002 11:44 AM
Subject: [CANSLIM] DFXI again


> Bought DFXI on 3/28 breakout. Sold for loss on 4/4. Sat back and watched
the
> stock surge higher, now hitting new highs on volume. Kicking myself for
> following CANSLIM rules.
>
> I know WON says this will happen but nevertheless it is discouraging. It's
> happened many times to me already. Each time it makes me want to throw
> CANSLIM out the window.
>
> I'm trying to ignore my emotions and do a constructive post-mortem. Did I
> buy wrong? I don't think so -- it was a nice cup-handle breakout and I
> bought within 5% of the pivot. Did I bail too soon? Maybe. I know you're
> supposed to cut losses at 8% period. But in this case on 4/4 it dropped
> below 8% only intraday, then it surged to recover above the pivot.
>
> In reviewing past similar trades, intraday activity has often been the
> cause. Many times a stock will shake out intraday only to recover before
the
> day is done.
>
> So I wonder, should the 8% sell rule be applied on closing prices only? In
> this case, if I waited until the end of trading on 4/4, I'd still be in
DFXI
> and enjoying the ride.
>
> Or maybe, should you simply ignore the first hour or two of trading during
> the day? It seems to me in many cases, early trading is very volatile and
> it's probably best to just sit on the sidelines until after lunch.
>
> --
> Dave
>
>
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