Go to Jeff Salisbury LWGate Home Page.From: "NANCY POLCARO" <ZILLAGIRL@msn.com>
Subject: Re: [CANSLIM] stop losses and profits
Date: Fri, 16 Aug 2002 14:10:16 -0700
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- ------=_NextPart_001_0001_01C2452E.A5764940 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Katherine-here are my other questions-1) a new stage base is one of the b= ases(side movement ) between the 1 or 4 healthy rises( uptrends) in a sto= ck, while starting to count bases over again is done when a stock breaks = down and dips below the low point of the previous base. 2)If a stock bre= aks down after the 3rd or 4th rise and must undercut the previous low to = restart base count would someone like me a)let it drop to your buy point = b)let it drop 8% below c)let it drop to undercut the low of the previous = base d) don't buy in on the 3rd or 4th base or rise because it may fail. = 3) The difference in your response seems to be the lenght of time it t= ook the stock to rise. My thinking is that a stock that shoots up quickl= y will have profit taking and if it is healthy will turn up again( kind = of like the handle in CWH) while a stock that takes 6 weeks to rise shou= ld be stronger by then and if it falls it probably never was a strong sto= ck.( leaving out horrible days in the market when all falls.) Please excu= se my ignorance but the only way I know if I am progressing is to see how= much I am missing. Thanks again-I know you are a busy person Nancy =20 - ----- Original Message ----- From: Katherine Malm Sent: Friday, August 16, 2002 12:32 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] stop losses and profits =20 Hi Nancy, Let me try and clear up some of your confusion: 1. A stock's "rise" does not occur *in* a base, but *between* bases. Whil= e the price will fluctuate up and down within the base itself, the amount o= f fluctuation will vary depending on the severity of correction and the tim= e it takes to form the area of consolidation. The stock is essentially *absorbing* the gains of its previous advance. 2. When you purchase a stock, you will always purchase it as it *breaks o= ut* of that base. This preferred buy point is referred to as the "pivot" and = is again defined by the pattern that the base forms. 4. When a stock begins a healthy rising pattern after it breaks out, it c= an rise *any* amount before it consolidates (bases) again. There is no hard = and fast rule as to how much it will rise before basing, though WON suggests that if it is >=3D25%, the next base would then be considered a "new stag= e base." This is only important in that his studies show that most stocks can't muster the oomph to keep going after they've reached the 3rd or 4th stage base. 3. Mike's question about a sell rule is not dependent on *which* base in = the base count we are evaluating. A base is a base. If the stock breaks out a= s it should and begins to rise, how are you going to handle selling it when= /if the time comes? 4. WON suggests that, if you buy correctly at the pivot (or no more than = 5% above it), that you should never have to suffer a loss of more than 8%. T= his is because, in his studies, he has found that a healthy stock never falls more than 8% below the pivot before continuing a healthy advance. 5. Mike's question, specifically, was "if a stock breaks out of a base, t= hen rises 10-15%, then falls back, where do you place your sell stop? 8% belo= w your buy price or something other than that?" In other words, should you = be willing to accept *any* loss if a stock has managed to rise 10-15% in 6 w= ks, then falls back to where you bought it. My vote is, if it takes 6 wks to rise and then erases the entire advance, I don't want to take an 8% loss.= If it rose 10-15% in *one* week and then fell back on low volume, I'd look a= t that as "normal" and might consider it a second chance to *buy* more. Katherine - ----- Original Message ----- From: "NANCY POLCARO" <zillagirl@msn.com> To: <canslim@lists.xmission.com> Sent: Friday, August 16, 2002 1:47 PM Subject: Re: [CANSLIM] stop losses and profits | Katherine-let me see if I am following correctly please. My question i= s | that previously I understood that after the third rise in a base format= ion a | stock may correct by dropping below the previous base and then starting= up | again if all is well with the stock. Then the bases start to be recoun= ted | again. In this case, if you just bought in during the third rise in th= e | base, which from my understanding would probably go up between 15%(Mike= s | figure) and 25%( the amount of each rise in a base of a healthy stock) = you | would sell(not you personally but someone with my amount of experience = or | the like) before the 8% drop, to protect your gain. Then follow the st= ock | and watch for a buy in again at some point depending on how the stock a= cts | from this point on? Is that close to correct ??? Thanks for your thoughts | Nancy | | | >From: "Katherine Malm" <kmalm@earthlink.net> | >Reply-To: canslim@lists.xmission.com | >To: <canslim@lists.xmission.com> | >Subject: Re: [CANSLIM] stop losses and profits | >Date: Fri, 16 Aug 2002 13:09:30 -0500 | > | >HI Mike, | > | >I think you'll get a hundred different answers on this one, so I'll ju= st | >answer from my personal point of view. | > | >If a stock breaks out of a well-formed base on volume, then takes 6 we= eks | >to | >rise 10 or 15 percent, then I sure wouldn't want to risk 8% loss at th= at | >point, even if it were falling back "normally" as you suggest. To me t= hat | >means that no sell signals were triggered on the way up, and that the | >general pattern included up days on higher volume than down days, supp= ort | >at | >the 50 day moving average, etc. My personal preference, however, would= be | >to | >move my stop to breakeven or slightly below (3-4% max, depending on market | >conditions) if the stock had risen like this. | > | >Katherine | > | > | >----- Original Message ----- | >From: <michael_niemotka@baxter.com> | >To: <canslim@lists.xmission.com> | >Sent: Friday, August 16, 2002 9:17 AM | >Subject: [CANSLIM] stop losses and profits | > | > | >| Group, | >| | >| In reading WON, he makes a statement that you should never let a sto= ck in | >| which you are up 10-15% turn into a loss, but I was wondering you ha= ve | >| interpreted that along with the sell at no more than an 8% loss rule= . | >| | >| Say you buy a stock, at a breakout, and it rises 10-15% over a few (= 6+ | >| weeks), and then is started to correct....Do you sell at you break e= ven | >| point, or do you allow it to go to your 8% loss point before selling= ? | >This | >| is assuming that the stock is NOT giving any strong sell signals, bu= t | >| appears to be pulling back "normally". | >| | >| Thanks | >| | >| Mike Niemotka , PE | >| Sr. Principal Engineer | >| Baxter Healthcare Corporation | >| Route 120 & Wilson Road | >| Round Lake, IL 60073 | >| Tel (847) 270-4075 | >| Fax (847) 270-4525 | >| michael_niemotka@baxter.com | >| | >| | >| | >| - | >| -To subscribe/unsubscribe, email "majordomo@xmission.com" | >| -In the email body, write "subscribe canslim" or | >| -"unsubscribe canslim". Do not use quotes in your email. | > | > | >- | >-To subscribe/unsubscribe, email "majordomo@xmission.com" | >-In the email body, write "subscribe canslim" or | >-"unsubscribe canslim". Do not use quotes in your email. | | | | | _________________________________________________________________ | Send and receive Hotmail on your mobile device: http://mobile.msn.com | | | - | -To subscribe/unsubscribe, email "majordomo@xmission.com" | -In the email body, write "subscribe canslim" or | -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_001_0001_01C2452E.A5764940 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <HTML><BODY STYLE=3D"font:10pt verdana; border:none;"><DIV>Katherine-here= are my other questions-1) a new stage base is one of the bases(side= movement ) between the 1 or 4 healthy rises( uptrends) in a stock, = while starting to count bases over again is done when a stock breaks down= and dips below the low point of the previous base. 2)If a stock br= eaks down after the 3rd or 4th rise and must undercut the previous l= ow to restart base count would someone like me a)let it drop to your buy = point b)let it drop 8% below c)let it drop to undercut the low of th= e previous base d) don't buy in on the 3rd or 4th base or rise because it= may fail. 3) The difference in your response seems to = be the lenght of time it took the stock to rise. My thinking is tha= t a stock that shoots up quickly will have profit taking and if it = is healthy will turn up again( kind of like the handle in CWH) whil= e a stock that takes 6 weeks to rise should be stronger by then and if it= falls it probably never was a strong stock.( leaving out horrible days i= n the market when all falls.) Please excuse my ignorance but the only way= I know if I am progressing is to see how much I am missing. Thanks= again-I know you are a busy person Nancy</DIV> <DIV> </DIV> <= BLOCKQUOTE style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5= px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FON= T: 10pt Arial">----- Original Message -----</DIV> <DIV style=3D"BACKGROUN= D: #e4e4e4; FONT: 10pt Arial; COLOR: black"><B>From:</B> Katherine Malm</= DIV> <DIV style=3D"FONT: 10pt Arial"><B>Sent:</B> Friday, August 16, 2002= 12:32 PM</DIV> <DIV style=3D"FONT: 10pt Arial"><B>To:</B> canslim@lists.= xmission.com</DIV> <DIV style=3D"FONT: 10pt Arial"><B>Subject:</B> Re: [C= ANSLIM] stop losses and profits</DIV> <DIV> </DIV>Hi Nancy,<BR><BR>L= et me try and clear up some of your confusion:<BR><BR>1. A stock's "rise"= does not occur *in* a base, but *between* bases. While<BR>the price will= fluctuate up and down within the base itself, the amount of<BR>fluctuati= on will vary depending on the severity of correction and the time<BR>it t= akes to form the area of consolidation. The stock is essentially<BR>*abso= rbing* the gains of its previous advance.<BR><BR>2. When you purchase a s= tock, you will always purchase it as it *breaks out*<BR>of that base. Thi= s preferred buy point is referred to as the "pivot" and is<BR>again defin= ed by the pattern that the base forms.<BR><BR>4. When a stock begins a he= althy rising pattern after it breaks out, it can<BR>rise *any* amount bef= ore it consolidates (bases) again. There is no hard and<BR>fast rule as t= o how much it will rise before basing, though WON suggests<BR>that if it = is >=3D25%, the next base would then be considered a "new stage<BR>bas= e." This is only important in that his studies show that most stocks<BR>c= an't muster the oomph to keep going after they've reached the 3rd or 4th<= BR>stage base.<BR><BR>3. Mike's question about a sell rule is not depende= nt on *which* base in the<BR>base count we are evaluating. A base is a ba= se. If the stock breaks out as<BR>it should and begins to rise, how are y= ou going to handle selling it when/if<BR>the time comes?<BR><BR>4. WON su= ggests that, if you buy correctly at the pivot (or no more than 5%<BR>abo= ve it), that you should never have to suffer a loss of more than 8%. This= <BR>is because, in his studies, he has found that a healthy stock never f= alls<BR>more than 8% below the pivot before continuing a healthy advance.= <BR><BR>5. Mike's question, specifically, was "if a stock breaks out of a= base, then<BR>rises 10-15%, then falls back, where do you place your sel= l stop? 8% below<BR>your buy price or something other than that?" In othe= r words, should you be<BR>willing to accept *any* loss if a stock has man= aged to rise 10-15% in 6 wks,<BR>then falls back to where you bought it. = My vote is, if it takes 6 wks to<BR>rise and then erases the entire advan= ce, I don't want to take an 8% loss. If<BR>it rose 10-15% in *one* week a= nd then fell back on low volume, I'd look at<BR>that as "normal" and migh= t consider it a second chance to *buy* more.<BR><BR>Katherine<BR><BR><BR>= - ----- Original Message -----<BR>From: "NANCY POLCARO" <zillagirl@msn.c= om><BR>To: <canslim@lists.xmission.com><BR>Sent: Friday, August = 16, 2002 1:47 PM<BR>Subject: Re: [CANSLIM] stop losses and profits<BR><BR= ><BR>| Katherine-let me see if I am following correctly please. My = question is<BR>| that previously I understood that after the third rise i= n a base formation<BR>a<BR>| stock may correct by dropping below the prev= ious base and then starting up<BR>| again if all is well with the stock.&= nbsp; Then the bases start to be recounted<BR>| again. In this case= , if you just bought in during the third rise in the<BR>| base, which fro= m my understanding would probably go up between 15%(Mikes<BR>| figure) an= d 25%( the amount of each rise in a base of a healthy stock) you<BR>| wou= ld sell(not you personally but someone with my amount of experience or<BR= >| the like) before the 8% drop, to protect your gain. Then follow = the stock<BR>| and watch for a buy in again at some point depending on ho= w the stock acts<BR>| from this point on? Is that close to correct = ??? Thanks for your<BR>thoughts<BR>| Nancy<BR>|<BR>|<BR>| >From:= "Katherine Malm" <kmalm@earthlink.net><BR>| >Reply-To: canslim@= lists.xmission.com<BR>| >To: <canslim@lists.xmission.com><BR>| &= gt;Subject: Re: [CANSLIM] stop losses and profits<BR>| >Date: Fri, 16 = Aug 2002 13:09:30 -0500<BR>| ><BR>| >HI Mike,<BR>| ><BR>| >I = think you'll get a hundred different answers on this one, so I'll just<BR= >| >answer from my personal point of view.<BR>| ><BR>| >If a sto= ck breaks out of a well-formed base on volume, then takes 6 weeks<BR>| &g= t;to<BR>| >rise 10 or 15 percent, then I sure wouldn't want to risk 8%= loss at that<BR>| >point, even if it were falling back "normally" as = you suggest. To me that<BR>| >means that no sell signals were triggere= d on the way up, and that the<BR>| >general pattern included up days o= n higher volume than down days, support<BR>| >at<BR>| >the 50 day m= oving average, etc. My personal preference, however, would be<BR>| >to= <BR>| >move my stop to breakeven or slightly below (3-4% max, dependin= g on<BR>market<BR>| >conditions) if the stock had risen like this.<BR>= | ><BR>| >Katherine<BR>| ><BR>| ><BR>| >----- Original Mes= sage -----<BR>| >From: <michael_niemotka@baxter.com><BR>| >To= : <canslim@lists.xmission.com><BR>| >Sent: Friday, August 16, 20= 02 9:17 AM<BR>| >Subject: [CANSLIM] stop losses and profits<BR>| ><= BR>| ><BR>| >| Group,<BR>| >|<BR>| >| In reading WON, he make= s a statement that you should never let a stock<BR>in<BR>| >| which yo= u are up 10-15% turn into a loss, but I was wondering you have<BR>| >|= interpreted that along with the sell at no more than an 8% loss rule.<BR= >| >|<BR>| >| Say you buy a stock, at a breakout, and it rises 10-1= 5% over a few (6+<BR>| >| weeks), and then is started to correct....Do= you sell at you break even<BR>| >| point, or do you allow it to go to= your 8% loss point before selling?<BR>| >This<BR>| >| is assuming = that the stock is NOT giving any strong sell signals, but<BR>| >| appe= ars to be pulling back "normally".<BR>| >|<BR>| >| Thanks<BR>| >= |<BR>| >| Mike Niemotka , PE<BR>| >| Sr. Principal Engineer<BR>| &g= t;| Baxter Healthcare Corporation<BR>| >| Route 120 & Wilson Road<= BR>| >| Round Lake, IL 60073<BR>| >| Tel (847) 270-4075<BR>| >| = Fax (847) 270-4525<BR>| >| michael_niemotka@baxter.com<BR>| >|<BR>|= >|<BR>| >|<BR>| >| -<BR>| >| -To subscribe/unsubscribe, emai= l "majordomo@xmission.com"<BR>| >| -In the email body, write "subscrib= e canslim" or<BR>| >| -"unsubscribe canslim". Do not use quotes = in your email.<BR>| ><BR>| ><BR>| >-<BR>| >-To subscribe/unsu= bscribe, email "majordomo@xmission.com"<BR>| >-In the email body, writ= e "subscribe canslim" or<BR>| >-"unsubscribe canslim". Do not us= e quotes in your email.<BR>|<BR>|<BR>|<BR>|<BR>| ________________________= _________________________________________<BR>| Send and receive Hotmail o= n your mobile device: http://mobile.msn.com<BR>|<BR>|<BR>| -<BR>| -To sub= scribe/unsubscribe, email "majordomo@xmission.com"<BR>| -In the email bod= y, write "subscribe canslim" or<BR>| -"unsubscribe canslim". Do not= use quotes in your email.<BR><BR><BR>-<BR>-To subscribe/unsubscribe, ema= il "majordomo@xmission.com"<BR>-In the email body, write "subscribe cansl= im" or<BR>-"unsubscribe canslim". Do not use quotes in your email.<= BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_001_0001_01C2452E.A5764940-- - - - -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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