Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Date: Tue, 3 Sep 2002 08:23:31 -0400

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John, the simplistic answer would be "M", but as someone who is not willing
to sit in cash and accept money market returns, I understand continuing to
try to find the few winners out there. And the major indexes all showed a
higher high to go with the higher lows by 8/15 or so.

As was discussed here, the saturation news on CSTR was not something that
was predictable. Frankly, I don't know that extreme Due Diligence would have
disclosed this as a concern, with so many other companies expanding and
opening new outlets. At the time, the stock was not signaling a sell. Your
entry appears correct, doesn't help that you did everything pretty much "by
the book" and still lost well over your 8% stop.

Theoretically, on CVH you could have chosen to sell when it appeared the b/o
was failing. That might have gotten you out with a break even or so. But I
know when I do that, invariably my sell becomes a market signal to buy, and
I watch it run right back up. So it becomes more a case where you are
determined not to lose money on a trade that initially worked.

"M" is making me more cautious lately, it's why I used hard stops last week,
and was already executed on two of three. Both have run back up higher than
where I was sold. In both cases I was protecting profits. Unlike my usual
behavior I have not bought anything new, altho I have a shopping list ready.
Today looks to be ugly, I will be evaluating my prospects during the day.

I do have access to the markets during the day, but it is unpredictable.
Some days I am so busy that my first look at the market, and my stocks,
comes at 6 PM or so. Other days I can at least peek in once or twice during
the day. I try to monitor what I own, and if I miss something I want to buy,
oh well, there will always be another train leaving the station, I just have
to find it.

- ----- Original Message -----
From: "John Calkins" <jcalkins@olypen.com>
To: <canslim@lists.xmission.com>
Sent: Tuesday, September 03, 2002 7:52 AM
Subject: [CANSLIM] CSTR CVH Failed breakouts Post Analysis


Ok, now that I have admitted that I didn't make a huge blunder buying CSTR
and CVH on their breakouts.  I need advice on how I can improve after
loosing a large percentage on these two stocks.

I'm unable to be at a computer during the day, so I check the volume and
price with TD Waterhouse Phone Trade Direct.  My first pick like many was
CSTR.  On August 15th it brokeout and I purchased it at $32.50.  I set my
Sell Stop at 8% below my purchase price at $29.90.  My stop order was
executed at $26.61 after the gap down.  I guess I consider myself lucky it
didn't execute at $24 what ever because of the price action for the day.  My
second trade was with CVH.  It broke out on August 19th and was able to
purchase it at $33.83.  The sell stop order was again placed at 8% below at
$31.12.  My sell stop was executed at $28.75.

This is the most difficult time I have had with my orders yet.  I have
usually been able to get much closer to my stop price.  I can't afford to
loose and average of 16% or double the CANSLIM method.  I have heard that it
is unwise to "Tip you hand" by having a stop order out there for the market
makers to grab.  But if I'm such a small fish out there, then how on earth
could my little stop order influence anyone?  Is there a trading platform
that is better at setting up unattended orders.  I've heard of trailing
stops etc. but aren't these just ideas or soft stops that you have to watch
the intra-day action of the market to take advantage of?

I just can't seem to get out of the shoot...I suppose along with everyone
else.  I understand that Due Diligence might have helped on these two
stocks, but who would have ever thought both of these would have gapped over
my stop orders like this!

I sure would like to know how you buy and sell when you can't glue yourself
to a monitor all day long.  I hope that the digital cell tower shows up
close to where I work so I can at least get price and volume alerts sent to
me.  I had this before and it worked better than this stop order crapola.

(JC)


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