Re: [CANSLIM] HTRN

From: Davellil5@aol.com
Subject: Re: [CANSLIM] HTRN
Date: Wed, 24 Jul 2002 20:18:10 EDT

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Mike, I've had the same experience recently on stocks with great numbers that 
fizzled after breaking out, after only a 10 to 15 % rise.

 <A HREF="aol://4785:HTRN:NAS">Click here: AOL Quotes - HTRN(US)</A> 

The 6-month chart shows that HTRN broke out in May, and went up over 20% 
before collapsing.  I don't see any secondary base formation (of 7 weeks or 
more) since breakout that would have justified recent purchase, but I also 
can't see anything in the chart action to predict the collapse.

So, I looked at the numbers.  The Company has very good numbers and while 
they carry 1.5 times as much debt as equity, their earnings cover debt 
service requirements by 14.5 to 1, well covered.  The only really adverse 
number I saw was the percentage of stock held by institutions, only 6%.  WON 
says look for stocks already owned 30% by institutions -- meaning it's been 
noticed.

But the institutions and mutuals have been uniformly adding to their 
positions, and insiders have not been selling off (thru May31st).

This leaves me with two conjectures.  One, that in this spooky market, 
investors are too scared to hang on once a stock has gained 15 or 20%.  
Maybe, we have to grab small gains and try to make enough of them to stay 
ahead.  Second, and especially because of the precipitous drop, maybe someone 
knows something that we don't know.

Bitter experience!  If a stock drops 8%, get out.  If it drops more than 8% 
before you can catch it, get out anyway.  Don't wait to find out what's 
happening.  The stock may rebound, but we shouldn't take that chance, 
especially in this market.

Regards, Dave




 

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