Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] stop losses and profits
Date: Fri, 16 Aug 2002 16:31:14 -0500
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Hi Nancy,
Let me be more general in this response. Don't worry about counting =
bases when making sell decisions. Sell rules are primarily based on =
price/volume action, not which base the stock is in. Base counting is of =
only minor significance in the grand scheme of things and is most useful =
in deciding whether or not to buy a breakout from a 3rd or 4th stage =
base. All in all, I'd place it just about last in "things to consider =
when buying."
Sell rules are relatively complex. The first and foremost is, never let =
a stock drop more than 8% below your buy price. Beyond that, rules are =
relatively numerous and often open to interpretation. More than =
anything, if it's a strong Bull market and you've managed to hold =
through a series of bases, then your final decision to exit will depend =
on your overall goals and your interpretation of the chart.
Katherine
----- Original Message -----=20
From: NANCY POLCARO=20
To: canslim=20
Sent: Friday, August 16, 2002 4:10 PM
Subject: Re: [CANSLIM] stop losses and profits
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 breaks 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 took the stock to rise. My thinking is that 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) while 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 =
in 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
----- 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
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. =
While
the price will fluctuate up and down within the base itself, the =
amount of
fluctuation will vary depending on the severity of correction and =
the time
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 out*
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 can
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 =
stage
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 as
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%. This
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, then
rises 10-15%, then falls back, where do you place your sell stop? 8% =
below
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 wks,
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 at
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 is
| that previously I understood that after the third rise in a base =
formation
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 =
recounted
| again. In this case, if you just bought in during the third rise =
in the
| base, which from my understanding would probably go up between =
15%(Mikes
| 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 stock
| and watch for a buy in again at some point depending on how the =
stock acts
| 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 just
| >answer from my personal point of view.
| >
| >If a stock breaks out of a well-formed base on volume, then takes =
6 weeks
| >to
| >rise 10 or 15 percent, then I sure wouldn't want to risk 8% loss =
at that
| >point, even if it were falling back "normally" as you suggest. To =
me that
| >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, =
support
| >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 stock
in
| >| which you are up 10-15% turn into a loss, but I was wondering =
you have
| >| 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 even
| >| 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, but
| >| 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.
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<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3D"MSHTML 6.00.2716.2200" name=3DGENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY=20
style=3D"BORDER-RIGHT: medium none; BORDER-TOP: medium none; FONT: 10pt =
verdana; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"=20
bgColor=3D#ffffff>
<DIV><FONT face=3D"Times New Roman" size=3D3>Hi Nancy,</FONT></DIV>
<DIV><FONT face=3D"Times New Roman" size=3D3></FONT> </DIV>
<DIV><FONT face=3D"Times New Roman" size=3D3>Let me be more general in =
this=20
response. Don't worry about counting bases when making sell decisions. =
Sell=20
rules are primarily based on price/volume action, not which base the =
stock is=20
in. Base counting is of only minor significance in the grand scheme of =
things=20
and is most useful in deciding whether or not to buy a breakout from a =
3rd or=20
4th stage base. All in all, I'd place it just about last in =
"things to=20
consider when buying."</FONT></DIV>
<DIV><FONT face=3D"Times New Roman" size=3D3></FONT> </DIV>
<DIV><FONT face=3D"Times New Roman" size=3D3>Sell rules are relatively =
complex. The=20
first and foremost is, never let a stock drop more than 8% below your =
buy price.=20
Beyond that, rules are relatively numerous and often open to =
interpretation.=20
More than anything, if it's a strong Bull market and you've managed to =
hold=20
through a series of bases, then your final decision to exit will depend =
on your=20
overall goals and your interpretation of the chart.</FONT></DIV>
<DIV><FONT face=3D"Times New Roman" size=3D3></FONT> </DIV>
<DIV><FONT face=3D"Times New Roman" size=3D3>Katherine</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3DZILLAGIRL@msn.com href=3D"mailto:ZILLAGIRL@msn.com">NANCY =
POLCARO</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, August 16, 2002 =
4:10=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] stop =
losses and=20
profits</DIV>
<DIV><BR></DIV>
<DIV>Katherine-here are my other questions-1) a new stage base is =
one of=20
the bases(side movement ) between the 1 or 4 healthy rises( =
uptrends) in=20
a stock, while starting to count bases over again is done when a stock =
breaks=20
down and dips below the low point of the previous base. 2)If a =
stock=20
breaks down after the 3rd or 4th rise and must undercut the =
previous low=20
to restart base count would someone like me a)let it drop to your buy =
point=20
b)let it drop 8% below c)let it drop to undercut the low of the =
previous=20
base d) don't buy in on the 3rd or 4th base or rise because it may=20
fail. 3) The difference in your response seems to be =
the=20
lenght of time it took the stock to rise. My thinking is that a =
stock=20
that shoots up quickly will have profit taking and if it is =
healthy will=20
turn up again( kind of like the handle in CWH) while a stock =
that takes=20
6 weeks to rise should be stronger by then and if it falls it probably =
never=20
was a strong stock.( leaving out horrible days in the market when all =
falls.)=20
Please excuse my ignorance but the only way I know if I am progressing =
is to=20
see how much I am missing. Thanks again-I know you are a busy=20
person Nancy</DIV>
<DIV> </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt Arial">----- Original Message -----</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt Arial; COLOR: =
black"><B>From:</B>=20
Katherine Malm</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>Sent:</B> Friday, August 16, 2002 =
12:32=20
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: [CANSLIM] stop =
losses and=20
profits</DIV>
<DIV> </DIV>Hi Nancy,<BR><BR>Let me try and clear up some of =
your=20
confusion:<BR><BR>1. A stock's "rise" does not occur *in* a base, =
but=20
*between* bases. While<BR>the price will fluctuate up and down =
within the=20
base itself, the amount of<BR>fluctuation will vary depending on the =
severity of correction and the time<BR>it takes to form the area of=20
consolidation. The stock is essentially<BR>*absorbing* the gains of =
its=20
previous advance.<BR><BR>2. When you purchase a stock, you will =
always=20
purchase it as it *breaks out*<BR>of that base. This preferred buy =
point is=20
referred to as the "pivot" and is<BR>again defined by the pattern =
that the=20
base forms.<BR><BR>4. When a stock begins a healthy rising pattern =
after it=20
breaks out, it can<BR>rise *any* amount before it consolidates =
(bases)=20
again. There is no hard and<BR>fast rule as to how much it will rise =
before=20
basing, though WON suggests<BR>that if it is >=3D25%, the next =
base would=20
then be considered a "new stage<BR>base." This is only important in =
that his=20
studies show that most stocks<BR>can't muster the oomph to keep =
going after=20
they've reached the 3rd or 4th<BR>stage base.<BR><BR>3. Mike's =
question=20
about a sell rule is not dependent on *which* base in the<BR>base =
count we=20
are evaluating. A base is a base. If the stock breaks out as<BR>it =
should=20
and begins to rise, how are you going to handle selling it =
when/if<BR>the=20
time comes?<BR><BR>4. WON suggests that, if you buy correctly at the =
pivot=20
(or no more than 5%<BR>above it), that you should never have to =
suffer a=20
loss of more than 8%. This<BR>is because, in his studies, he has =
found that=20
a healthy stock never falls<BR>more than 8% below the pivot before=20
continuing a healthy advance.<BR><BR>5. Mike's question, =
specifically, was=20
"if a stock breaks out of a base, then<BR>rises 10-15%, then falls =
back,=20
where do you place your sell stop? 8% below<BR>your buy price or =
something=20
other than that?" In other words, should you be<BR>willing to accept =
*any*=20
loss if a stock has managed to rise 10-15% in 6 wks,<BR>then falls =
back to=20
where you bought it. My vote is, if it takes 6 wks to<BR>rise and =
then=20
erases the entire advance, I don't want to take an 8% loss. If<BR>it =
rose=20
10-15% in *one* week and then fell back on low volume, I'd look =
at<BR>that=20
as "normal" and might consider it a second chance to *buy*=20
more.<BR><BR>Katherine<BR><BR><BR>----- Original Message =
- -----<BR>From:=20
"NANCY POLCARO" <zillagirl@msn.com><BR>To:=20
<canslim@lists.xmission.com><BR>Sent: Friday, August 16, 2002 =
1:47=20
PM<BR>Subject: Re: [CANSLIM] stop losses and profits<BR><BR><BR>|=20
Katherine-let me see if I am following correctly please. My =
question=20
is<BR>| that previously I understood that after the third rise in a =
base=20
formation<BR>a<BR>| stock may correct by dropping below the previous =
base=20
and then starting up<BR>| again if all is well with the stock. =
Then=20
the bases start to be recounted<BR>| again. In this case, if =
you just=20
bought in during the third rise in the<BR>| base, which from my=20
understanding would probably go up between 15%(Mikes<BR>| figure) =
and 25%(=20
the amount of each rise in a base of a healthy stock) you<BR>| would =
sell(not you personally but someone with my amount of experience =
or<BR>| the=20
like) before the 8% drop, to protect your gain. Then follow =
the=20
stock<BR>| and watch for a buy in again at some point depending on =
how the=20
stock acts<BR>| from this point on? Is that close to correct =
??? =20
Thanks for your<BR>thoughts<BR>| Nancy<BR>|<BR>|<BR>| >From: =
"Katherine=20
Malm" <kmalm@earthlink.net><BR>| >Reply-To:=20
canslim@lists.xmission.com<BR>| >To:=20
<canslim@lists.xmission.com><BR>| >Subject: Re: [CANSLIM] =
stop=20
losses and profits<BR>| >Date: Fri, 16 Aug 2002 13:09:30 =
- -0500<BR>|=20
><BR>| >HI Mike,<BR>| ><BR>| >I think you'll get a =
hundred=20
different answers on this one, so I'll just<BR>| >answer from my =
personal=20
point of view.<BR>| ><BR>| >If a stock breaks out of a =
well-formed=20
base on volume, then takes 6 weeks<BR>| >to<BR>| >rise 10 or =
15=20
percent, then I sure wouldn't want to risk 8% loss at that<BR>| =
>point,=20
even if it were falling back "normally" as you suggest. To me =
that<BR>|=20
>means that no sell signals were triggered on the way up, and =
that=20
the<BR>| >general pattern included up days on higher volume than =
down=20
days, support<BR>| >at<BR>| >the 50 day moving average, etc. =
My=20
personal preference, however, would be<BR>| >to<BR>| >move my =
stop to=20
breakeven or slightly below (3-4% max, depending on<BR>market<BR>|=20
>conditions) if the stock had risen like this.<BR>| ><BR>|=20
>Katherine<BR>| ><BR>| ><BR>| >----- Original Message =
- -----<BR>|=20
>From: <michael_niemotka@baxter.com><BR>| >To:=20
<canslim@lists.xmission.com><BR>| >Sent: Friday, August 16, =
2002=20
9:17 AM<BR>| >Subject: [CANSLIM] stop losses and profits<BR>| =
><BR>|=20
><BR>| >| Group,<BR>| >|<BR>| >| In reading WON, he =
makes a=20
statement that you should never let a stock<BR>in<BR>| >| which =
you are=20
up 10-15% turn into a loss, but I was wondering you have<BR>| >|=20
interpreted that along with the sell at no more than an 8% loss =
rule.<BR>|=20
>|<BR>| >| Say you buy a stock, at a breakout, and it rises =
10-15%=20
over a few (6+<BR>| >| weeks), and then is started to =
correct....Do you=20
sell at you break even<BR>| >| point, or do you allow it to go to =
your 8%=20
loss point before selling?<BR>| >This<BR>| >| is assuming that =
the=20
stock is NOT giving any strong sell signals, but<BR>| >| appears =
to be=20
pulling back "normally".<BR>| >|<BR>| >| Thanks<BR>| =
>|<BR>| >|=20
Mike Niemotka , PE<BR>| >| Sr. Principal Engineer<BR>| >| =
Baxter=20
Healthcare Corporation<BR>| >| Route 120 & Wilson Road<BR>| =
>|=20
Round Lake, IL 60073<BR>| >| Tel (847) 270-4075<BR>| >| Fax =
(847)=20
270-4525<BR>| >| michael_niemotka@baxter.com<BR>| >|<BR>| =
>|<BR>|=20
>|<BR>| >| -<BR>| >| -To subscribe/unsubscribe, email=20
"majordomo@xmission.com"<BR>| >| -In the email body, write =
"subscribe=20
canslim" or<BR>| >| -"unsubscribe canslim". Do not use =
quotes in=20
your email.<BR>| ><BR>| ><BR>| >-<BR>| >-To=20
subscribe/unsubscribe, email "majordomo@xmission.com"<BR>| >-In =
the email=20
body, write "subscribe canslim" or<BR>| >-"unsubscribe =
canslim". Do=20
not use quotes in your email.<BR>|<BR>|<BR>|<BR>|<BR>|=20
=
_________________________________________________________________<BR>| =
Send=20
and receive Hotmail on your mobile device:=20
http://mobile.msn.com<BR>|<BR>|<BR>| -<BR>| -To =
subscribe/unsubscribe, email=20
"majordomo@xmission.com"<BR>| -In the email body, write "subscribe =
canslim"=20
or<BR>| -"unsubscribe canslim". Do not use quotes in your=20
email.<BR><BR><BR>-<BR>-To subscribe/unsubscribe, email=20
"majordomo@xmission.com"<BR>-In the email body, write "subscribe =
canslim"=20
or<BR>-"unsubscribe canslim". Do not use quotes in your=20
email.<BR></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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