Go to Jeff Salisbury LWGate Home Page.From: "Jerome Buckmelter" <jsjbuck@myexcel.com>
Subject: RE: [CANSLIM] Bailing out of a would-be breakout
Date: Thu, 3 Apr 2003 23:28:40 -0800
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Tom, Thanks again for your input. I was surprised to read that you
generally buy into a breakout only after closing on the breakout day. I
always thought that one needed to monitor the market very closely in
order to buy as close to the pivot as possible to be successful in this
business. In the past three years I purchased stocks that were 3 to 5
percent above the pivot and got shaken out of most of them. But that
could very well have been the market. In better times I guess buying at
3 to 5 percent above the pivot might work better. What you do (buying
after the market closes) certainly makes sense. At least you know
conclusively that the volume materialized. I especially was intrigued
with your comment that you would not buy during the first hour or two.
Why is that? Also, you were right about the 4-day handle. I bent that
rule. The reason is -- the other day I passed on HITK which broke out
after forming a 4-day handle. And it is doing great. That was still
fresh in my mind. I didn't want to miss out on a similar breakout. It
seems that a lot of stocks breakout that do not meet all the
fundamentals and technicals, few probably do. I guess the trick is to
bend the fewest rules as possible and know why you're doing so. And, of
course, the main thing may be to just stay in the game and keep
swinging. You're bound to get a big hit sooner or later. I'm still
waiting for mine. Thanks again.
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley
Sent: Thursday, April 03, 2003 8:48 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Bailing out of a would-be breakout
for a correct ("proper") breakout, I would certainly want to see volume
at least 50% over ADV (and preferably at least 100%). Problem with that
is for those trying to catch a breakout during the day, when the price
may have broken the pivot, and volume up to that point looks like it
will reach these levels, but then volume slows way up in the afternoon.
I rarely have the time to try to catch b/o's during the day, so normally
can consider the full day's trading with some leisure at night, or early
the next morning. But if I was to buy during the day, and volume up to
that point indicated double or better day's average (assuming I was at
least an hour or two into the day), then a slowdown in the afternoon
would not by itself cause me to sell out. Once I am in a stock, I rely
much more on the chart pattern, where it closes in terms of that day's
trading range, and whether it is up or down on more or less than ADV.
One of the principles of CANSLIM, in addition to being able to read the
charts, is to buy on a breakout within 5% of the pivot, then use an 8%
stop loss from your purchase price. This means you could slip below the
pivot, and still not feel obligated to sell. The closer to the pivot you
buy, the further below the pivot you could ride it.
In the case you mention with FRX, one point I would emphasize, which I
suspect you are already sensitive to, is that you saw a b/o with only a
4 day handle. The cup itself was well formed, including a capitulation
day on 2/14/03 on 2X ADV. However, the shortness of the handle, combined
with the lack of time for volume to dry up, suggests to me that the b/o
that enticed you was far too immature, especially given the state of
"M", and the market susceptibility to emotional reaction to the war in
Iraq (which has nothing to do at least directly to either "M" or the
state of the economy, but is nonetheless the most current overwhelming
and overriding influence on "M").
Sometimes you can get away with buying too quickly, or too early, but
normally you want the trend ("M") already in your favor when you do so.
With the economy continuing to weaken, emotions still very high over the
war with Iraq, and a lot of uncertainty still remaining, I think I would
be unlikely to buy a breakout intraday unless it had already traded
twice a normal ADV, regardless of just how far it is in the trading day.
Should you now sell (if you haven't already)?? I can't answer that, even
with today's drop below the pivot, and on 1.5X ADV. Certainly today was
not encouraging. But your investment time frame, risk tolerance, whether
you bot the entire intended position or just a portion, etc. all affect
what you should do now. The stock has not broken down, the fundies
remain quite healthy, forecasts are strong for the longer term.
- ----- Original Message -----
From: Jerome Buckmelter <mailto:jsjbuck@myexcel.com>
To: canslim@lists.xmission.com
Sent: Thursday, April 03, 2003 11:04 AM
Subject: RE: [CANSLIM] Bailing out of a would-be breakout
Tom, Thank you for your input. I value your insights and opinions. Is
it not true that if volume does not reach 50%, a breakout has not
occurred by definition? Therefore shouldn't I view the action I
described with FRX as not a breakout, and think about treating the buy
differently from a genuine breakout, i.e., setting the loss at 7% or 8%,
etc.? I
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley
Sent: Wednesday, April 02, 2003 8:14 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Bailing out of a would-be breakout
Jerome, assuming you are accurate in selecting the pivot point, and
bought within 5% of that point, then I would stick to a stop loss of 8
- -10% below your purchase price. This is a very volatile and emotional
market. I would also pay close attention to where such a stop loss price
places you with recent downside support. Depending on that, I might use
a larger or smaller stop loss, so that my selling point is just under
support, especially institutional support.
- ----- Original Message -----
From: Jerome Buckmelter <mailto:jsjbuck@myexcel.com>
To: CANSLIM <mailto:canslim@lists.xmission.com> LIST
Sent: Wednesday, April 02, 2003 10:22 PM
Subject: [CANSLIM] Bailing out of a would-be breakout
Does anyone have an idea how to handle a "breakout" if it doesn't act
right on the first day? I got fooled this morning by the huge volume
FRX displayed as it zoomed by its pivot (on a 4-day handle). Of course,
everything else was surging upwards at the opening of the market! FRX
cooled off as the day progressed, and its volume ended the day a little
above average. And the price, of course, dropped below my purchase
price, but still held above the pivot. Some time ago I devised a
strategy for myself for such occasions, but I haven't tested it yet, and
I hope I could get some feed back from fellow CANSLIMers before making a
mistake with it. Here's my strategy: Sell near at the end of the first
day if 50% volume does not materialize and stock closes below purchase
price. Hold if volume does not materialize and stock price closes above
the purchase price. Sell at the end of the second day if volume does not
materialize, even if the price is up. Sell the second day if the price
falls below the pivot. Is this a sound strategy? Does WON address this
situation anywhere? Can anyone share their strategy? I would really
appreciate some input. Thanks.
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<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Tom, Thanks again for your =
input.<span
style=3D'mso-spacerun:yes'> </span>I was surprised to read that =
you
generally buy into a breakout only after closing on the breakout day. =
<span
style=3D'mso-spacerun:yes'> </span>I always thought that one needed =
to
monitor the market very closely in order to buy as close to the pivot as
possible to be successful in this business.<span
style=3D'mso-spacerun:yes'> </span>In the past three years I =
purchased
stocks that were 3 to 5 percent above the pivot and got shaken out of =
most of
them.<span style=3D'mso-spacerun:yes'> </span>But that could very =
well have
been the market.<span style=3D'mso-spacerun:yes'> </span>In better =
times I
guess buying at 3 to 5 percent above the pivot might work better. <span
style=3D'mso-spacerun:yes'> </span>What you do (buying after =
the
market closes) certainly makes sense.<span =
style=3D'mso-spacerun:yes'>
</span>At least you know conclusively that the volume materialized.<span
style=3D'mso-spacerun:yes'> </span>I especially was intrigued with =
your
comment that you would not buy during the first hour or two.<span
style=3D'mso-spacerun:yes'> </span>Why is that? <span
style=3D'mso-spacerun:yes'> </span>Also, you were right about the =
4-day
handle.<span style=3D'mso-spacerun:yes'> </span>I bent that =
rule.<span
style=3D'mso-spacerun:yes'> </span>The reason is -- the other day =
I passed
on HITK which broke out after forming a 4-day handle.<span
style=3D'mso-spacerun:yes'> </span>And it is doing great. <span
style=3D'mso-spacerun:yes'> </span>That was still fresh in my =
mind.<span
style=3D'mso-spacerun:yes'> </span>I didn’t want to miss out =
on a
similar breakout.<span style=3D'mso-spacerun:yes'> </span>It seems =
that a
lot of stocks breakout that do not meet all the fundamentals and =
technicals,
few probably do.<span style=3D'mso-spacerun:yes'> </span>I guess =
the trick
is to bend the fewest rules as possible and know why you’re doing
so.<span style=3D'mso-spacerun:yes'> </span>And, of course, the =
main thing
may be to just stay in the game and keep swinging. You’re bound to =
get a
big hit sooner or later.<span style=3D'mso-spacerun:yes'> =
</span>I’m
still waiting for mine. Thanks again.<span =
style=3D'mso-spacerun:yes'>
</span><span style=3D'mso-spacerun:yes'> </span><span
style=3D'mso-spacerun:yes'> </span><span
style=3D'mso-spacerun:yes'> </span><span
style=3D'mso-spacerun:yes'> </span><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Tom Worley<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> =
</span></font><st1:date
Month=3D"4" Day=3D"3" Year=3D"2003"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:
10.0pt;font-family:Tahoma'>Thursday, April 03, =
2003</span></font></st1:date><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'> </span></font><st1:time
Hour=3D"20" Minute=3D"48"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;
font-family:Tahoma'>8:48 PM</span></font></st1:time><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'><br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] =
Bailing out
of a would-be breakout</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>for a correct =
("proper")
breakout, I would certainly want to see volume at least 50% over ADV =
(and
preferably at least 100%). Problem with that is for those trying to =
catch a
breakout during the day, when the price may have broken the pivot, and =
volume
up to that point looks like it will reach these levels, but then volume =
slows
way up in the afternoon.</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>I rarely have the time to =
try to
catch b/o's during the day, so normally can consider the full day's =
trading
with some leisure at night, or early the next morning. But if I was to =
buy
during the day, and volume up to that point indicated double or better =
day's
average (assuming I was at least an hour or two into the day), then a =
slowdown
in the afternoon would not by itself cause me to sell out. Once I am in =
a
stock, I rely much more on the chart pattern, where it closes in terms =
of that
day's trading range, and whether it is up or down on more or less than =
ADV.</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>One of the principles of =
CANSLIM, in
addition to being able to read the charts, is to buy on a breakout =
within 5% of
the pivot, then use an 8% stop loss from your purchase price. This means =
you
could slip below the pivot, and still not feel obligated to sell. The =
closer to
the pivot you buy, the further below the pivot you could ride it. =
</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>In the case you mention =
with FRX,
one point I would emphasize, which I suspect you are already sensitive =
to, is
that you saw a b/o with only a 4 day handle. The cup itself was well =
formed,
including a capitulation day on </span></font><st1:date Month=3D"2" =
Day=3D"14"
Year=3D"2003"><font face=3DArial><span =
style=3D'font-family:Arial'>2/14/03</span></font></st1:date><font
face=3DArial><span style=3D'font-family:Arial'> on 2X ADV. However, the =
shortness
of the handle, combined with the lack of time for volume to dry up, =
suggests to
me that the b/o that enticed you was far too immature, especially given =
the
state of "M", and the market susceptibility to emotional =
reaction to
the war in Iraq (which has nothing to do at least directly to either
"M" or the state of the economy, but is nonetheless the most =
current
overwhelming and overriding influence on =
"M").</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>Sometimes you can get away =
with
buying too quickly, or too early, but normally you want the trend
("M") already in your favor when you do so. With the economy
continuing to weaken, emotions still very high over the war with =
</span></font><st1:country-region><st1:place><font
face=3DArial><span =
style=3D'font-family:Arial'>Iraq</span></font></st1:place></st1:country-r=
egion><font
face=3DArial><span style=3D'font-family:Arial'>, and a lot of =
uncertainty still
remaining, I think I would be unlikely to buy a breakout intraday unless =
it had
already traded twice a normal ADV, regardless of just how far it is in =
the
trading day.</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>Should you now sell (if you =
haven't
already)?? I can't answer that, even with today's drop below the pivot, =
and on
1.5X ADV. Certainly today was not encouraging. But your investment time =
frame,
risk tolerance, whether you bot the entire intended position or just a =
portion,
etc. all affect what you should do now. The stock has not broken down, =
the
fundies remain quite healthy, forecasts are strong for the longer term. =
</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>----- Original Message =
- ----- <o:p></o:p></span></font></p>
<div style=3D'font-color:black'>
<p class=3DMsoNormal =
style=3D'margin-left:.5in;background:#E4E4E4'><b><font size=3D2
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>From:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:jsjbuck@myexcel.com" title=3D"jsjbuck@myexcel.com">Jerome =
Buckmelter</a>
<o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>To:</span><=
/font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:canslim@lists.xmission.com" =
title=3D"canslim@lists.xmission.com">canslim@lists.xmission.com</a>
<o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Sent:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:date
Month=3D"4" Day=3D"3" Year=3D"2003"><font size=3D2 face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial'>Thursday, April 03, =
2003</span></font></st1:date><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:time
Hour=3D"11" Minute=3D"4"><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>11:04 AM</span></font></st1:time><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p></o:p></span></font></p=
>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Subject:</s=
pan></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> RE:
[CANSLIM] Bailing out of a would-be =
breakout<o:p></o:p></span></font></p>
</div>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Tom, Thank you =
for your
input.<span style=3D'mso-spacerun:yes'> </span>I value your =
insights and
opinions.<span style=3D'mso-spacerun:yes'> </span>Is it not true =
that if
volume does not reach 50%, a breakout has not occurred by =
definition?<span
style=3D'mso-spacerun:yes'> </span>Therefore shouldn’t I =
view the
action I described with FRX as not a breakout, and think about treating =
the buy
differently from a genuine breakout, i.e., setting the loss at 7% or 8%,
etc.?<span style=3D'mso-spacerun:yes'> =
</span>I<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'><o:p> </o:p>=
</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Tom Worley<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> =
</span></font><st1:date
Month=3D"4" Day=3D"2" Year=3D"2003"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:
10.0pt;font-family:Tahoma'>Wednesday, April 02, =
2003</span></font></st1:date><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'> </span></font><st1:time
Hour=3D"20" Minute=3D"14"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;
font-family:Tahoma'>8:14 PM</span></font></st1:time><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'><br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] =
Bailing out
of a would-be breakout</span></font><o:p></o:p></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>Jerome, assuming you are =
accurate in
selecting the pivot point, and bought within 5% of that point, then I =
would
stick to a stop loss of 8 -10% below your purchase price. This is a very
volatile and emotional market. I would also pay close attention to where =
such a
stop loss price places you with recent downside support. Depending on =
that, I
might use a larger or smaller stop loss, so that my selling point is =
just under
support, especially institutional support.</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'> </span></font><o:p></o=
:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>----- Original Message =
- ----- <o:p></o:p></span></font></p>
<div style=3D'font-color:black'>
<p class=3DMsoNormal =
style=3D'margin-left:1.0in;background:#E4E4E4'><b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;font-weight:
bold'>From:</span></font></b><font size=3D2 face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial'> <a href=3D"mailto:jsjbuck@myexcel.com"
title=3D"jsjbuck@myexcel.com">Jerome Buckmelter</a> =
<o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>To:</span><=
/font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:canslim@lists.xmission.com" =
title=3D"canslim@lists.xmission.com">CANSLIM
LIST</a> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Sent:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:date
Month=3D"4" Day=3D"2" Year=3D"2003"><font size=3D2 face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial'>Wednesday, April 02, =
2003</span></font></st1:date><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:time
Hour=3D"22" Minute=3D"22"><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>10:22 PM</span></font></st1:time><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p></o:p></span></font></p=
>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Subject:</s=
pan></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> [CANSLIM]
Bailing out of a would-be breakout<o:p></o:p></span></font></p>
</div>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Does anyone have an idea =
how to handle
a “breakout” if it doesn’t act right on the first =
day?<span
style=3D'mso-spacerun:yes'> </span>I got fooled this morning by =
the huge
volume FRX displayed as it zoomed by its pivot (on a 4-day handle).<span
style=3D'mso-spacerun:yes'> </span>Of course, everything else was =
surging
upwards at the opening of the market!<span =
style=3D'mso-spacerun:yes'>
</span>FRX cooled off as the day progressed, and its volume ended the =
day a
little above average.<span style=3D'mso-spacerun:yes'> </span>And =
the
price, of course, dropped below my purchase price, but still held above =
the
pivot.<span style=3D'mso-spacerun:yes'> </span>Some time ago I =
devised a
strategy for myself for such occasions, but I haven’t tested it =
yet, and
I hope I could get some feed back from fellow CANSLIMers before making a
mistake with it.<span style=3D'mso-spacerun:yes'> =
</span>Here’s my
strategy:<span style=3D'mso-spacerun:yes'> </span>Sell near at the =
end of
the first day if 50% volume does not materialize and stock closes below
purchase price. Hold if volume does not materialize and stock price =
closes
above the purchase price. Sell at the end of the second day if volume =
does not
materialize, even if the price is up.<span =
style=3D'mso-spacerun:yes'>
</span>Sell the second day if the price falls below the pivot.<span
style=3D'mso-spacerun:yes'> </span>Is this a sound strategy?<span
style=3D'mso-spacerun:yes'> </span>Does WON address this situation
anywhere?<span style=3D'mso-spacerun:yes'> </span>Can anyone share =
their
strategy?<span style=3D'mso-spacerun:yes'> </span>I would really =
appreciate
some input.<span style=3D'mso-spacerun:yes'> </span>Thanks. =
<o:p></o:p></span></font></p>
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