Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Bailing out of a would-be breakout
Date: Fri, 4 Apr 2003 07:05:52 -0500
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Hi Jerome,
One of the important things about CANSLIM is knowing the rules, and =
recognizing when you are bending (or even breaking) them. Any time you =
do so, it must raise an extra caution flag.
To be honest, because I rarely can watch the market closely during the =
day, I usually buy prior to the b/o, then wait for it to happen. Since I =
invest for long term (1-2 years), I can afford to be more patient. It =
also often permits me to buy close to strong support, so if the b/o =
fails, it still will often leave me with a small profit. Unlike many =
CANSLIMers, who search for c&h patterns, my personal favorite is a flat =
line base with a very tight trading range that has lasted for a month or =
two at least. I will also buy a c&h pattern while still forming the =
handle if I see volume drying up without much decline in the handle. In =
both cases, I am usually buying below the pivot, and close to support, =
at the expense / risk of tying up capital for an indefinite time period. =
I cannot emphasize too much the importance of "M". When it is bearish, =
as it is still today, it becomes more risky to bend any rules. Making a =
buy decision after the close at least means you are not rushed into that =
decision, and can help take away the sense of missing something if you =
don't act immediately. The trade off is that by the close, it may be =
well past the pivot. In those cases, I may enter a limit buy back in the =
area of support in case the b/o fails, or gives a second entry =
opportunity.
Even tho I typically do an hour of more of "market evaluation" on a =
global scale each morning, I still try to avoid making any buys or sells =
in the first hour. The market can be very volatile in this period, and =
can completely reverse itself by 10:30 or 11. If by midday the trend is =
consistent since 9:30, then I have a little more confidence in the day's =
trend continuing on to 4 PM. If I am doing a trade in the first hour, it =
is because of what went on the prior day, I have already made a =
decision, and set a price for action.
The best way to "stay in the game" is to preserve capital. That means =
being in cash for most people, or only taking small positions with a =
limited portion of your investment dollars, when "M" says to be on the =
sidelines. Admittedly I personally will typically be fully invested, but =
I consider myself both very aggressive and a high risk taker. I thrive =
on stress, and take great delight in gaining a few percentage points in =
my portfolios especially when the markets are down. I do my best work =
when the markets are weak or declining, and small caps are being =
ignored. I break a lot of rules in what I do, including holding some =
stocks for a year or more. But that has also permitted me a number of =
100% or more profits.
- ----- Original Message -----=20
From: Jerome Buckmelter=20
To: canslim@lists.xmission.com=20
Sent: Friday, April 04, 2003 2:28 AM
Subject: RE: [CANSLIM] Bailing out of a would-be breakout
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. =20
=20
- -----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
=20
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.
=20
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.
=20
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.=20
=20
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").
=20
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.
=20
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.=20
=20
- ----- Original Message -----=20
From: Jerome Buckmelter=20
To: canslim@lists.xmission.com=20
Sent: Thursday, April 03, 2003 11:04 AM
Subject: RE: [CANSLIM] Bailing out of a would-be breakout
=20
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
=20
- -----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
=20
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.
=20
- ----- Original Message -----=20
From: Jerome Buckmelter=20
To: CANSLIM LIST=20
Sent: Wednesday, April 02, 2003 10:22 PM
Subject: [CANSLIM] Bailing out of a would-be breakout
=20
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.=20
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<DIV><FONT face=3DArial>Hi Jerome,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>One of the important things about CANSLIM is =
knowing the=20
rules, and recognizing when you are bending (or even breaking) them. Any =
time=20
you do so, it must raise an extra caution flag.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>To be honest, because I rarely can watch the =
market=20
closely during the day, I usually buy prior to the b/o, then wait for it =
to=20
happen. Since I invest for long term (1-2 years), I can afford to be =
more=20
patient. It also often permits me to buy close to strong support, so if =
the b/o=20
fails, it still will often leave me with a small profit. Unlike many =
CANSLIMers,=20
who search for c&h patterns, my personal favorite is a flat line =
base with a=20
very tight trading range that has lasted for a month or two at least. I =
will=20
also buy a c&h pattern while still forming the handle if I see =
volume drying=20
up without much decline in the handle. In both cases, I am usually =
buying below=20
the pivot, and close to support, at the expense / risk of tying up =
capital for=20
an indefinite time period. </FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I cannot emphasize too much the importance of =
"M". When it=20
is bearish, as it is still today, it becomes more risky to bend any =
rules.=20
Making a buy decision after the close at least means you are not rushed =
into=20
that decision, and can help take away the sense of missing something if =
you=20
don't act immediately. The trade off is that by the close, it may be =
well past=20
the pivot. In those cases, I may enter a limit buy back in the area of =
support=20
in case the b/o fails, or gives a second entry opportunity.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Even tho I typically do an hour of more of =
"market=20
evaluation" on a global scale each morning, I still try to avoid making =
any buys=20
or sells in the first hour. The market can be very volatile in this =
period, and=20
can completely reverse itself by 10:30 or 11. If by midday the trend is=20
consistent since 9:30, then I have a little more confidence in the day's =
trend=20
continuing on to 4 PM. If I am doing a trade in the first hour, it is =
because of=20
what went on the prior day, I have already made a decision, and set a =
price for=20
action.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>The best way to "stay in the game" is to =
preserve capital.=20
That means being in cash for most people, or only taking small positions =
with a=20
limited portion of your investment dollars, when "M" says to be on the=20
sidelines. Admittedly I personally will typically be fully invested, but =
I=20
consider myself both very aggressive and a high risk taker. I thrive on =
stress,=20
and take great delight in gaining a few percentage points in my =
portfolios=20
especially when the markets are down. I do my best work when the markets =
are=20
weak or declining, and small caps are being ignored. I break a lot of =
rules in=20
what I do, including holding some stocks for a year or more. But that =
has also=20
permitted me a number of 100% or more profits.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Djsjbuck@myexcel.com href=3D"mailto:jsjbuck@myexcel.com">Jerome=20
Buckmelter</A> </DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV><B>Sent:</B> Friday, April 04, 2003 2:28 AM</DIV>
<DIV><B>Subject:</B> RE: [CANSLIM] Bailing out of a would-be=20
breakout</DIV></DIV>
<DIV><BR></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">Tom, Thanks =
again for=20
your input.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I was =
surprised to read=20
that you generally buy into a breakout only after closing on the =
breakout day.=20
<SPAN style=3D"mso-spacerun: yes"> </SPAN>I always thought that one =
needed to=20
monitor the market very closely in order to buy as close to the pivot as =
possible to be successful in this business.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>In the past three years I =
purchased=20
stocks that were 3 to 5 percent above the pivot and got shaken out of =
most of=20
them.<SPAN style=3D"mso-spacerun: yes"> </SPAN>But that could very =
well have=20
been the market.<SPAN style=3D"mso-spacerun: yes"> </SPAN>In =
better times I=20
guess buying at 3 to 5 percent above the pivot might work better. <SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>What you do (buying after =
the=20
market closes) certainly makes sense.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>At least you know conclusively that the volume materialized.<SPAN =
style=3D"mso-spacerun: yes"> </SPAN>I especially was intrigued =
with your=20
comment that you would not buy during the first hour or two.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Why is that? <SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Also, you were right about the =
4-day=20
handle.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I bent that =
rule.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>The reason is -- the other day =
I passed=20
on HITK which broke out after forming a 4-day handle.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>And it is doing great. <SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>That was still fresh in my =
mind.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>I didn=92t want to miss out on =
a similar=20
breakout.<SPAN style=3D"mso-spacerun: yes"> </SPAN>It seems that a =
lot of=20
stocks breakout that do not meet all the fundamentals and technicals, =
few=20
probably do.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I guess the =
trick is=20
to bend the fewest rules as possible and know why you=92re doing =
so.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>And, of course, the main thing =
may be to=20
just stay in the game and keep swinging. You=92re bound to get a big hit =
sooner or=20
later.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I=92m still =
waiting for mine.=20
Thanks again.<SPAN style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DTahoma =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]=20
<B><SPAN style=3D"FONT-WEIGHT: bold">On Behalf Of </SPAN></B>Tom=20
Worley<BR><B><SPAN style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B>=20
</SPAN></FONT><st1:date Year=3D"2003" Day=3D"3" Month=3D"4"><FONT =
face=3DTahoma=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">Thursday, =
April 03,=20
2003</SPAN></FONT></st1:date><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"> </SPAN></FONT><st1:time=20
Minute=3D"48" Hour=3D"20"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">8:48=20
PM</SPAN></FONT></st1:time><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"><BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">To:</SPAN></B> =
canslim@lists.xmission.com<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [CANSLIM] Bailing =
out of a=20
would-be breakout</SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">for a correct ("proper") =
breakout, I=20
would certainly want to see volume at least 50% over ADV (and preferably =
at=20
least 100%). Problem with that is for those trying to catch a breakout =
during=20
the day, when the price may have broken the pivot, and volume up to that =
point=20
looks like it will reach these levels, but then volume slows way up in =
the=20
afternoon.</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">I rarely have the time to =
try to=20
catch b/o's during the day, so normally can consider the full day's =
trading with=20
some leisure at night, or early the next morning. But if I was to buy =
during the=20
day, and volume up to that point indicated double or better day's =
average=20
(assuming I was at least an hour or two into the day), then a slowdown =
in the=20
afternoon would not by itself cause me to sell out. Once I am in a =
stock, I rely=20
much more on the chart pattern, where it closes in terms of that day's =
trading=20
range, and whether it is up or down on more or less than=20
ADV.</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">One of the principles of =
CANSLIM, in=20
addition to being able to read the charts, is to buy on a breakout =
within 5% of=20
the pivot, then use an 8% stop loss from your purchase price. This means =
you=20
could slip below the pivot, and still not feel obligated to sell. The =
closer to=20
the pivot you buy, the further below the pivot you could ride it.=20
</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">In the case you mention =
with FRX,=20
one point I would emphasize, which I suspect you are already sensitive =
to, is=20
that you saw a b/o with only a 4 day handle. The cup itself was well =
formed,=20
including a capitulation day on </SPAN></FONT><st1:date Year=3D"2003" =
Day=3D"14"=20
Month=3D"2"><FONT face=3DArial><SPAN=20
style=3D"FONT-FAMILY: Arial">2/14/03</SPAN></FONT></st1:date><FONT=20
face=3DArial><SPAN style=3D"FONT-FAMILY: Arial"> on 2X ADV. However, the =
shortness=20
of the handle, combined with the lack of time for volume to dry up, =
suggests to=20
me that the b/o that enticed you was far too immature, especially given =
the=20
state of "M", and the market susceptibility to emotional reaction to the =
war in=20
Iraq (which has nothing to do at least directly to either "M" or the =
state of=20
the economy, but is nonetheless the most current overwhelming and =
overriding=20
influence on "M").</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">Sometimes you can get away =
with=20
buying too quickly, or too early, but normally you want the trend ("M") =
already=20
in your favor when you do so. With the economy continuing to weaken, =
emotions=20
still very high over the war with=20
</SPAN></FONT><st1:country-region><st1:place><FONT face=3DArial><SPAN=20
style=3D"FONT-FAMILY: =
Arial">Iraq</SPAN></FONT></st1:place></st1:country-region><FONT=20
face=3DArial><SPAN style=3D"FONT-FAMILY: Arial">, and a lot of =
uncertainty still=20
remaining, I think I would be unlikely to buy a breakout intraday unless =
it had=20
already traded twice a normal ADV, regardless of just how far it is in =
the=20
trading day.</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">Should you now sell (if =
you haven't=20
already)?? I can't answer that, even with today's drop below the pivot, =
and on=20
1.5X ADV. Certainly today was not encouraging. But your investment time =
frame,=20
risk tolerance, whether you bot the entire intended position or just a =
portion,=20
etc. all affect what you should do now. The stock has not broken down, =
the=20
fundies remain quite healthy, forecasts are strong for the longer term.=20
</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">----- Original Message =
- -----=20
<o:p></o:p></SPAN></FONT></P>
<DIV style=3D"font-color: black">
<P class=3DMsoNormal style=3D"BACKGROUND: #e4e4e4; MARGIN-LEFT: =
0.5in"><B><FONT=20
face=3DArial size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">From:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> <A=20
title=3Djsjbuck@myexcel.com href=3D"mailto:jsjbuck@myexcel.com">Jerome=20
Buckmelter</A> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><B><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">To:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> <A=20
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
<o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><B><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">Sent:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">=20
</SPAN></FONT><st1:date Year=3D"2003" Day=3D"3" Month=3D"4"><FONT =
face=3DArial=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Thursday, =
April 03,=20
2003</SPAN></FONT></st1:date><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> </SPAN></FONT><st1:time =
Minute=3D"4"=20
Hour=3D"11"><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">11:04=20
AM</SPAN></FONT></st1:time><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><B><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">Subject:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> RE:=20
[CANSLIM] Bailing out of a would-be=20
breakout<o:p></o:p></SPAN></FONT></P></DIV></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P></DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">Tom, Thank=20
you for your input.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I =
value your=20
insights and opinions.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Is =
it not=20
true that if volume does not reach 50%, a breakout has not occurred by=20
definition?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Therefore =
shouldn=92t I=20
view the action I described with FRX as not a breakout, and think about =
treating=20
the buy differently from a genuine breakout, i.e., setting the loss at =
7% or 8%,=20
etc.?<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>I<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3DTahoma =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]=20
<B><SPAN style=3D"FONT-WEIGHT: bold">On Behalf Of </SPAN></B>Tom=20
Worley<BR><B><SPAN style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B>=20
</SPAN></FONT><st1:date Year=3D"2003" Day=3D"2" Month=3D"4"><FONT =
face=3DTahoma=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">Wednesday, =
April 02,=20
2003</SPAN></FONT></st1:date><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"> </SPAN></FONT><st1:time=20
Minute=3D"14" Hour=3D"20"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">8:14=20
PM</SPAN></FONT></st1:time><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"><BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">To:</SPAN></B> =
canslim@lists.xmission.com<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [CANSLIM] Bailing =
out of a=20
would-be breakout</SPAN></FONT><o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3D"Times New =
Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: Arial">Jerome, assuming you are =
accurate in=20
selecting the pivot point, and bought within 5% of that point, then I =
would=20
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=20
stop loss price places you with recent downside support. Depending on =
that, I=20
might use a larger or smaller stop loss, so that my selling point is =
just under=20
support, especially institutional =
support.</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3DArial =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: =
Arial"> </SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">----- Original Message =
- -----=20
<o:p></o:p></SPAN></FONT></P>
<DIV style=3D"font-color: black">
<P class=3DMsoNormal style=3D"BACKGROUND: #e4e4e4; MARGIN-LEFT: =
1in"><B><FONT=20
face=3DArial size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">From:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> <A=20
title=3Djsjbuck@myexcel.com href=3D"mailto:jsjbuck@myexcel.com">Jerome=20
Buckmelter</A> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><B><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">To:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> <A=20
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">CANSLIM LIST</A>=20
<o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><B><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">Sent:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">=20
</SPAN></FONT><st1:date Year=3D"2003" Day=3D"2" Month=3D"4"><FONT =
face=3DArial=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Wednesday, =
April 02,=20
2003</SPAN></FONT></st1:date><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> </SPAN></FONT><st1:time =
Minute=3D"22"=20
Hour=3D"22"><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">10:22=20
PM</SPAN></FONT></st1:time><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><B><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">Subject:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> [CANSLIM]=20
Bailing out of a would-be =
breakout<o:p></o:p></SPAN></FONT></P></DIV></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3D"Times New =
Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P></DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Does anyone have an idea =
how to=20
handle a =93breakout=94 if it doesn=92t act right on the first day?<SPAN =
style=3D"mso-spacerun: yes"> </SPAN>I got fooled this morning by =
the huge=20
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=20
upwards at the opening of the market!<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>FRX cooled off as the day progressed, and its volume ended the =
day a=20
little above average.<SPAN style=3D"mso-spacerun: yes"> </SPAN>And =
the=20
price, of course, dropped below my purchase price, but still held above =
the=20
pivot.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Some time ago I =
devised a=20
strategy for myself for such occasions, but I haven=92t tested it yet, =
and I hope=20
I could get some feed back from fellow CANSLIMers before making a =
mistake with=20
it.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Here=92s my =
strategy:<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Sell near at the end of the =
first day if=20
50% volume does not materialize and stock closes below purchase price. =
Hold if=20
volume does not materialize and stock price closes above the purchase =
price.=20
Sell at the end of the second day if volume does not materialize, even =
if the=20
price is up.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Sell the =
second day if=20
the price falls below the pivot.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Is=20
this a sound strategy?<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Does WON=20
address this situation anywhere?<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Can anyone share their strategy?<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>I would really appreciate some input.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Thanks.=20
<o:p></o:p></SPAN></FONT></P></DIV></BODY></HTML>
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