Go to Jeff Salisbury LWGate Home Page.From: michael_niemotka@baxter.com
Subject: Re: [CANSLIM] stop losses and profits
Date: Tue, 20 Aug 2002 14:19:53 -0500
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Katherine,
I actually followed this thinking and watched a nice profit (15%) in NCEN
turn into an 8% loss as the bottom dropped out. I think it has made me
make a modification to stop at break even if I end up at 15% gain, at least
until M has be proven to be turned. I came up with this based on assuming
a stock that breaks out would "normally" be expected to rise about 25-30%
before re-basing, so if never gets up by that amount from my buy point,
then I should exit sooner rather than later...
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
"Katherine Malm"
<kmalm@earthlink.net> To: canslim@lists.xmission.com
Sent by: cc:
owner-canslim@lists.xm Subject: Re: [CANSLIM] stop losses and profits
ission.com
08/16/2002 05:01 PM
Please respond to
canslim
Oops...I realize now I misread your question.
I would *hold on* up to 8% below buy price, but if the stock comes back and
*kisses* the pivot, then I would buy more. I'm not inclined to buy more
when the stock drops *below* the pivot, unless it shows strong volume
pushing it back up to the pivot and beyond. Now I think I've confused even
myself!
This is the way I think of it "Kiss the pivot, second chance to buy
more---Hit the pivot, yellow flag"
Katherine
- ----- Original Message -----
From: "Katherine Malm" <kmalm@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Friday, August 16, 2002 4:55 PM
Subject: Re: [CANSLIM] stop losses and profits
| Hi Mike,
|
| 8% standard stop loss, though I don't see this happen too often when the
| market is healthy.
|
| Katherine
|
| ----- Original Message -----
| From: <michael_niemotka@baxter.com>
| To: <canslim@lists.xmission.com>
| Sent: Friday, August 16, 2002 2:54 PM
| Subject: Re: [CANSLIM] stop losses and profits
|
|
| |
| | Katherine,
| |
| | I knew I could count on you for a good answer. As a follow up to your
| | answer #4, if you made 10-15% in one week, how low would you allow the
| | stock to drop on low volume and still buy more, as opposed to selling
out?
| |
| | Put another way, if it ran up 15% in a week, would you allow it to go
| below
| | your original buy point, even if it was at low volume?
| |
| |
| | Have a great weekend everyone!
| |
| | Mike
| |
| | 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
| |
| |
| |
| | "Katherine Malm"
| | <kmalm@earthlink.net> To:
| canslim@lists.xmission.com
| | Sent by: cc:
| | owner-canslim@lists.xm Subject: Re:
| [CANSLIM] stop losses and profits
| | ission.com
| |
| |
| | 08/16/2002 02:31 PM
| | Please respond to
| | canslim
| |
| |
| |
| |
| |
| |
| | 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 >=25%, 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
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| | |
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Next Article (by Subject): Re: [CANSLIM] stop losses and profits "Katherine Malm"
Previous Article (by Subject): Re: [CANSLIM] Question "Woody"
Next in Thread: Re: [CANSLIM] stop losses and profits "Katherine Malm"
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