RE: VRNT (was: [CANSLIM] Stop losses and DHI)

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: VRNT (was: [CANSLIM] Stop losses and DHI)
Date: Tue, 10 Jun 2003 21:01:28 -0500
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Hi Tomas,

Here are some questions you might ask in making this kind of decision:

(1) If I buy it back, is it a low-risk entry?
(2) If I buy it back, can I handle the price volatility that it typically
displays?
(3) If I buy it back, what will be my exit strategy, both for profit taking
and for cutting losses?
(4) Is this the best stock I can buy with my money? Or, would my money be
better off in *any* other investment than this? (This is also a good
question to ask when struggling with a sell decision.)
(5) Are there other stocks that are either pulling back on lower volume and
showing less volatility?
(6) Are there other stocks, equally attractive, that are offering a low risk
entry and/or a fresh breakout?
(7) What is my real motivation for buying it back? For example, is it
because I've answered all of the questions above and still feel that it is
the best investment at the time? Is it because I want to prove I was
something? Am I being smart or just stubborn? Etc.

Questions like this force the trader to be completely honest within
him/herself and make consistently wise and emotionless decisions.

Regardless of your decision, there are times where it can take a couple of
tries with the same stock to get it "right" and that is A-OK, as it is a
compilation of factors acting on the stock all at the same time. On the
other hand, sometimes when breakouts are whipsawing you one after the other,
that's a sign that the rally may be wearing thin. One stock doesn't make a
trend, but it's something to consider.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tomas
Sent: Tuesday, June 10, 2003 7:45 PM
To: canslim@lists.xmission.com
Subject: Re: Re: [CANSLIM] Stop losses and DHI


VRNT is back to a little above the pivot point.
Should I buy it back?  Or should I wait for a few days
and see what the market is doing.  The market seems to
be at a critical point where it is deciding if it will
head north or south.

What is the rule for buying back a stock that had such
a big dip 2 days after the BO with big volume, but is
now gaining back ground?  Is the big dip a red flag
enough to stay way from this stock?

With this stock, I feel like I am currently going
through a common mistake made by newbie.

You experience investors better stop me if I am going
to make a big mistake buying this stock back.  :)

tomas

- --- Bill Triffet <btriffet@earthlink.net> wrote:
> Hi Tomas,
>
> I think you partially answered yourself here. Had
> you bought it on the day
> of the breakout 6/3 you'd still be in (maybe...).
>
> Unfortunately VRNT gapped up the next day. I'd just
> pass on it and wait for
> a pullback which it did on 6/6. The huge volume of
> the pullback though was a
> red flag to me. I might have sold it even if I got
> it in the range due to
> that. Also given the fact I've been using 7%
> stop-losses, I'd have been
> stopped out as well.
>
> Btw, I never use overnight buy orders as there's
> just too much volatility in
> the first 30min. Also, I want to see the price as I
> buy it.
>
> In the past I've used buy-limit orders for stocks I
> felt were ready to
> breakout. The issue there was to make sure it had
> enough projected volume
> for the day. If it closed up but on low volume I'd
> almost always have to
> sell the next day. For this  reason I just stick to
> market orders for buys.
> The trick is to get some free time during the work
> day to "sneak a peek" at
> my watchlist.
>
> --
> Bill
>
>
>
> ----- Original Message -----
> From: "Tomas" <tomas986@yahoo.com>
> To: <canslim@lists.xmission.com>
> Sent: Monday, June 09, 2003 7:59 PM
> Subject: Re: Re: [CANSLIM] Stop losses and DHI
>
>
> > Bill,
> >
> > I did not buy DHI, but had a position on VRNT,
> which
> > went down 12% last Friday(no stop loss order in
> > place).  I sold the stock this morning and
> actually
> > walked away with a 18% lost.  Post analysis:
> >
> > 1) BO on 6/3 with close $24.37 (Pivot point at
> > $23.95).  Put an order to buy on 6/3 that night.
> 6/4
> > morning, order execute at $26.21 (about 9% above
> pivot
> > point + .10).  Bought extended, should have put a
> > limit order instead of a market order?  But, if
> use
> > market order sometime will miss the boat on a good
> > stock...
> >
> > 2) On 6/6, stock went down $2.99.  Sold today at
> > $21.53.  Should have put a stop order when I
> bought
> > it?  Probably.
> >
> > Final note, if I bought it right, at pivot point +
> > $.10, then I would still be in the stock today.
> It
> > never actually go below the 8%.  I guess my
> trigger
> > finger is too slow, and need to be faster next
> time...
> >
> > So, this is why I am trying to figure out what
> kind of
> > orders (stop/lost, market, limit,...) I need to do
> for
> > buys and sells.  It's kind of though, since every
> kind
> > of order has its pro's and con's.
> >
> >
> > Regards,
> > tomas
> >
> >
> > --- Bill Triffet <btriffet@earthlink.net> wrote:
> > > Tomas,
> > > To this day the main rule I've never disagreed
> with
> > > WON has been "preservation of capital". " Live
> to
> > > trade another day" is the way to go.
> > >
> > > Appling a trailing stop after you've made some
> gains
> > > may knock you out of the stock. Maybe it
> continues
> > > on up after that. Maybe not. The point is you
> live
> > > to trade another day.
> > >
> > > Maybe give yourself more wiggle room if a stock
> is
> > > ramping up quickly and you've made some gains.
> > > Example: 7% stop-loss right after your purchace
> then
> > > slide it up to just at or above the pivot after
> > > you've made say 10-12%. This is a very
> subjective
> > > thing but for me it satisfies two rules.
> > > 1. Sell at 7% loss - no matter what.
> > > 2. Don't let a profit turn into a loss
> > >
> > > You didn't say when/where you bought DHI. How
> tight
> > > was your stop?
> > >
> > > I have to agree with Mike that unless your doing
> > > thinly traded stocks or are making some LARGE
> block
> > > trades your trades are under the "big guys"
> radar
> > > screens. I recall WON mentioning the phenomina
> at
> > > one of his seminars but he does much larger
> trades
> > > than me...
> > >
> > > --
> > > Bill
> > >
> > > -------Original Message-------
> > > From: Tomas <tomas986@yahoo.com>
> > > Sent: 06/09/03 10:40 AM
> > > To: canslim@lists.xmission.com
> > > Subject: Re: [CANSLIM] Stop losses and DHI
> > >
> > > >
> > > > So, the question is does it happens often
> enough
> > > to
> > > warrent not using stop orders?  I guess this is
> all
> > > dependent on the investor, if he/she have time
> to
> > > monitor intraday action and the risk tolerance
> > > level.
> > >
> > >
> > > tomas
> > >
> > >
> > > --- michael_niemotka@baxter.com wrote:
> > > >
> > > > I have also been stopped out in similar
> instances,
> > > > and I can only assume
> > > > that the specialists see large blocks at
> certain
> > > > price levels, because I
> > > > cannot believe that they would manipulate the
> > > market
> > > > unless it was really
> > > > worth the while.   My $1000 worth of stock
> would
> > > be
> > > > in the noise level if
> > > > considered on its own.
> > > >
> > > > 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
> > > >
> > > >
> > > >
> > >
> > > >
> > >
> > > >
> > > >                     Ian <ianstm@shaw.ca>
> > >
> > > >
> > >
> > > >
> > > >                     Sent by:
> > > To:
> > > >     canslim@lists.xmission.com
>
=== message truncated ===


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