Go to Jeff Salisbury LWGate Home Page.From: "DMC197807" <dmc197807@comcast.net>
Subject: Re: [CANSLIM] HITK--Trailing Stops
Date: Wed, 6 Aug 2003 12:11:16 -0700
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Yien, Here's today's article on using trailing stops from this site: http://www.investopedia.com/articles/trading/03/080603.asp Van Tharp and Stan Weinstein (Van & Stan) are both pretty good on setting trailing stops as well. DMC - ----- Original Message ----- From: "Yien T Lung" <ylung@engin.umich.edu> To: <canslim@lists.xmission.com> Sent: Wednesday, August 06, 2003 10:13 AM Subject: Re: [CANSLIM] HITK--Volume Studies > DMC > > Concerning HITK, what were the technical indicators that told you had to > get out of this stock ASAP? > > From my limited undertanding of TA (so bear with me), HITK should have > been sold on July 16 because: > - Smashed through the 50MA support > - Going down at above average volume > - Closed near to the low of the day > > Were there other factors that justified getting out prior to July 16? > > Thanks > Yien > > But other than that, > > On Wed, 6 Aug 2003, DMC197807 wrote: > > > One problem with threads and email lists is the topics tend to lack > > follow-through. The newest hot topic or stock du jour takes over the > > airspace and previous topics disappear. Perhaps they should, but I think > > the HITK education is out there for people who want to take the time to > > understand why this stock which gapped and crapped was an unlikely delight > > at $25, $26 or "under $25". One problem with getting your list of MILSCANs > > and IBD 100 stocks is you tend to love them long after their usefulness has > > evaporated (or long before they become useful again). > > > > First off, if you can part with some pi$tole$, may I suggest buying Donald > > Cassidy's Trading with Volume. As you can see from the reviews, some people > > think it's great, some think it doesn't tell you anything new. I think for > > $25 and a few hours of dedicated reading it's pretty good insurance against > > buying an exhaustion gap or jumping in to buy HITK as it's crumbling. If it > > saves you one bad trade (guaranteed to save you more, but . . .) then it's > > worth about 10 times the purchase price. It's generally not available in > > libraries: > > > > http://www.amazon.com/exec/obidos/tg/detail/-/0071376046/qid=1060182177/sr=1 > > -1/ref=sr_1_1/102-9779625-0378563?v=glance&s=books#product-details > > > > Those who trade on price alone are like people who fly airplanes on > > visibility alone. Or maybe trying to trade on price action alone is like > > trying to speak a foreign language with nothing but tons of vocabulary--no > > grammar, no semantic rules, no idioms, just a lot of words. If you've ever > > encountered a newly arrived foreign student in the hard sciences you get the > > drift. Volume is a key and crucial instrument. It's really too bad we can > > trade volume as well as price (that is, buy options on volume levels, rather > > than just price levels), but there's probably no efficient way to do it. > > Otoh, using volume to understand price is key. > > > > Another useful thing is just to scroll down this note, starting at the > > bottom and noting the dates. If you have a dual screen setup, you might put > > the daily or 60 minute chart of HITK up against it, and try to see what was > > going on at what point in the conversation. > > > > HITK is continuing its short, squat candlestick march on low volume, down > > below $23 as I type. How long will the bleeding last? Who knows, but at > > this angle and with this momentum (volume) it can be excruciating. How will > > it end? Impossible to say, but a likely scenario will be the wholesale > > dumping of shares if $20 doesn't hold. I don't see it holding. I think it > > could collapse tomorrow or the next day, then we might have an "echo" of the > > plunge from $40 to $25, with a little boost up to 28 (and all the bullish > > chatter) before it finds its proper bottom. Check now the widening of the > > Bollinger bands on the bottom side, giving this thing plenty of space to > > run. > > > > So, let's take another look around 8/15 to see if it has fallen through 20 > > to 15 and bounced. Looking out longer term, on the weekly chart, you can > > see some support at $10 and what looks like rock bottom fisher/vulture > > carcass at around $7-8. So, short term support at $20, $15; medium term > > support at $10 and an "event" or crushingly bad market could take us to $7. > > > > DMC > > > > ----- Original Message ----- > > From: "DMC197807" <dmc197807@comcast.net> > > To: <canslim@lists.xmission.com> > > Sent: Monday, August 04, 2003 8:56 AM > > Subject: Re: [CANSLIM] HITK > > > > > > > Perhaps members of the group will find it educational to follow HITK for a > > > little while longer. Nobody has a crystal ball on these things, but > > > experience has taught me the hard way that not paying attention to price > > > action and volume can be costly. > > > > > > As I opined earlier, this chart pattern is a very familiar, broken stock > > > picture. Volume keeps fading away as buyers back away from this name and > > > holders are just beginning to get the picture that the bleeding has only > > > begun, and hasn't begun to stop yet. We've now crossed up above the 200 > > dma > > > very weakly and fallen back down through it. I'd expect this stock to > > stay > > > below the 200 dma for a significant amount of time from now on, long after > > > all the averages complete their southerly curves. Since there are few > > > buyers it won't take many sellers to show up, dump their shares and get > > out. > > > That accounts for the small but steady march south. The Bollinger Bands > > > have now widened significantly; when a stock is rallying it can climb > > along > > > the upper band for a long time; the same happens on the bottom band when > > > it's falling. The bottom band is pointed directly toward $15 right now; I > > > see no reason why, given enough time this summer, it won't achieve and > > then > > > overshoot that number. If HITK had options, I'd be buying puts here. If > > I > > > was an HITK owner, I'd get out at any price right now. > > > > > > DMC > > > > > > ----- Original Message ----- > > > From: "DMC197807" <dmc197807@comcast.net> > > > To: <canslim@lists.xmission.com> > > > Sent: Monday, July 28, 2003 11:05 AM > > > Subject: Re: [CANSLIM] HITK > > > > > > > > > > Fanus, > > > > > > > > Thanks for your note. Each of us has his own system. Back in May I > > > traded > > > > HITK off the center of the Bollinger bands for a bounce which I got and > > I > > > > was monitoring it off shorter time frame charts. The mistake I made was > > > not > > > > holding on for the ride further up, but I was leaving for 10 days on the > > > > East Coast and couldn't afford to keep the position open, so I left with > > > > 9.3% gain in 7 days. If I can annualize that gain it's better than 300% > > > per > > > > year, so I like it. I kept a tight stop on the position so maybe your > > > > calculation of the risk wasn't mine. > > > > > > > > Everyone looks at risk and reward differently. You may see a stock > > which > > > > can rise up to 35 or 40 fairly easily (the reward) but I see a broken > > > chart > > > > and the likelihood of that happening as very, very slim. More likely, > > > given > > > > the pattern, is for the stock to pause and hiccup and continue to break > > > > down. Or it could stabilize and idle here at the $22-28 range for a > > > while. > > > > However, there have been a lot of buyers on the way up to $49 and not > > all > > > of > > > > them have sold. It often takes several days for the totality of a drop > > > from > > > > 49 to 25 to sink in. A lot of people hope it will recover, a lot try to > > > > trade out, but in the end the weight of the chart often produces the > > > > inevitable. > > > > > > > > Another way to look at your calculation is to try to figure out the > > > > probabilities within a given time frame (let's take 2 weeks, or 10 > > trading > > > > days) of your two speculation scenarios to play out: 1) drops to 23? > > > this > > > > is highly likely, imho, given the ATR where it is, call it 2-1; or 2) > > > rises > > > > to 35 or 40? this is a 40-1 shot, to me, in this time period, or worse. > > > So > > > > you calculate the value of the two and, with the stock where it is now, > > > > 26.50, you have a 50% chance of losing $3.50, or -1.75, and a 2.5% > > chance > > > of > > > > it rising to 35, or $0.87, so I wouldn't take your approach, not even > > with > > > > your money. > > > > > > > > What is the better approach? Patience, let the plunge work through its > > > > natural progression. > > > > > > > > This is what makes a market, though. Regards, > > > > > > > > DMC > > > > > > > > > > > > > > > > ----- Original Message ----- > > > > From: "Fanus" <fanus13@yahoo.com> > > > > To: <canslim@lists.xmission.com> > > > > Sent: Monday, July 28, 2003 10:19 AM > > > > Subject: Re: [CANSLIM] HITK > > > > > > > > > > > > > I haven't look at the CANSLIM characteristics, but > > > > > risk/reward look pretty good to me. > > > > > > > > > > If one trade it as a bounce off the 200DMA, then your > > > > > stop can be just below it. Say around 23.00. You > > > > > could have entered around 25.30 this morning, risking > > > > > 2.30. If I was trading it, I would expect it to > > > > > possibly stall at resistance around 35 to 40 which > > > > > would be my profit target. A profit target of about > > > > > 9.7 to 14.7. Risking 2.3 to get 9.7 is a risk/reward > > > > > ratio of 1/4.2. Risking 1 dollar to make 4.2. Good > > > > > enough for me. > > > > > > > > > > You mentioned that you bought HITK at 5/30/03 at > > > > > 34.20. From my side, I do not see significant support > > > > > close by, or a logical place to put a stop loss other > > > > > than the 50DMA which were at 30.74 on that date. A > > > > > risk of 3.46. You sold on 6/5 at 37.47; a profit of > > > > > 3.27. So you risk 3.46 to make 3.27, a risk/reward > > > > > ratio of 1/0.95. Risking 1 dollar to make 0.95. > > > > > > > > > > In my books, an entry now is much less risky than your > > > > > entry on 5/30. > > > > > > > > > > Regards > > > > > - Fanus > > > > > > > > > > > > > > > --- DMC197807 <dmc197807@comcast.net> wrote: > > > > > > MessageGene, > > > > > > > > > > > > I understood that. However, I think it's > > > > > > hard/dangerous to trade consistently (and safely) > > > > > > from signals generated by newsletters and stock > > > > > > pickers, or black boxes or discussion threads. I > > > > > > assume you are out of HITK at this point? > > > > > > > > > > > > My comments were and are limited to trying to grasp > > > > > > the total risk-reward on the name as indicated by > > > > > > the chart. Still too risky for me, maybe not for > > > > > > others. When the charts come into alignment, then > > > > > > money is made more easily, although not without > > > > > > risk. > > > > > > > > > > > > I took $3+ out of HITK at the end of May by > > > > > > following my discipline (bot 5/30 at 34.20, sold 6/5 > > > > > > at 37.47), and it was this experience which caught > > > > > > my attention with your post. > > > > > > > > > > > > HITK may close this week higher or lower, and at > > > > > > that point it may still not be a good speculation, > > > > > > for my money. > > > > > > > > > > > > Good luck, > > > > > > > > > > > > DMC > > > > > > > > > > > > > > > > > > ----- Original Message ----- > > > > > > From: Gene Ricci > > > > > > To: canslim@lists.xmission.com > > > > > > Sent: Monday, July 28, 2003 9:32 AM > > > > > > Subject: Re: [CANSLIM] HITK > > > > > > > > > > > > > > > > > > DMC, if you'll go back to my original email you'll > > > > > > see that I was making an observation ... and passing > > > > > > it on to potential holders of HITK .... based on a > > > > > > buy signal from ChangeWave. > > > > > > > > > > > > 'If you still own HITK there may be a light in the > > > > > > tunnel.' > > > > > > > > > > > > In the meantime I made 75 cents/share trading it > > > > > > this morning (going long)... after the opening > > > > > > pullback... > > > > > > > > > > > > Gene > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > ----- Original Message ----- > > > > > > From: DMC197807 > > > > > > To: canslim@lists.xmission.com > > > > > > Sent: Monday, July 28, 2003 11:01 AM > > > > > > Subject: Re: [CANSLIM] HITK > > > > > > > > > > > > > > > > > > Gene, > > > > > > > > > > > > Two thoughts come to mind. First is a ski area > > > > > > I frequent. Just below the highest lift are some > > > > > > cliffs which are out of bounds by regulation and > > > > > > also by dint of pure reason: they look like > > > > > > suicide. However, on any thick powder day there are > > > > > > a number of youth with their snowboards and skis > > > > > > doing the "extreme thing." For some reason only 2 > > > > > > people have gotten killed there in my memory, and a > > > > > > few bad accidents, but mostly these yahoos make it > > > > > > through. It doesn't mean it isn't an absurd risk to > > > > > > take, but there you are. > > > > > > > > > > > > Is HITK still a falling knife, or is it safe to > > > > > > buy? > > > > > > > > > > > > Second is: what is volume during normal trading > > > > > > and what is volume during a selloff? Clearly HITK > > > > > > is in a selloff, so I like to look at something like > > > > > > 10 day volume (or volume since the plunge) rather > > > > > > than 60-day volume. Here the 60-day volume is > > > > > > 583,000, but the most recent 8 days have coughed up > > > > > > about 10 million shares, or 1.25 million per day. I > > > > > > was looking at HITK early today and was surprised > > > > > > that the first hour, amateur hour, didn't produce > > > > > > more volume. It's now 2.5 hours into the trading > > > > > > day and it's still at 330,000 shares. > > > > > > > > > > > > I think today is simply a pause on the way down. > > > > > > I have no money in this name now and only look at > > > > > > it to determine when, on a trading basis, the reward > > > > > > might outweigh the risk. That event might not > > > > > > happen for several weeks and might take place at a > > > > > > higher price than today's (in fact, could easily do > > > > > > so). > > > > > > > > > > > > Mostly I think of this endeavor as the opposite > > > > > > of even recreational skiing. We want to find the > > > > > > easiest, most risk free way of having fun (making > > > > > > $$), not the adrenaline rushed version. If this > > > > > > were a ski slope, my scans would be scouting for not > > > > > > black diamond slopes or blue slopes. Unlike skiing, > > > > > > here I'm on the hunt for easy green slopes and even > > > > > > yellow bunny hop slopes. > > > > > > > > > > > > Good luck, > > > > > > > > > > > > DMC > > > > > > ----- Original Message ----- > > > > > > From: Gene Ricci > > > > > > To: canslim@lists.xmission.com > > > > > > Sent: Monday, July 28, 2003 7:35 AM > > > > > > Subject: Re: [CANSLIM] HITK > > > > > > > > > > > > > > > > > > The power of the newsletter assumes control... > > > > > > up 6% and 1/3 of the daily volume already. > > > > > > > > > > > > Gene > > > > > > ----- Original Message ----- > > > > > > From: DMC197807 > > > > > > To: canslim@lists.xmission.com > > > > > > Sent: Saturday, July 26, 2003 10:35 PM > > > > > > Subject: Re: [CANSLIM] HITK > > > > > > > > > > > > > > > > > > Technically your risk/reward on this name > > > > > > would be skewed toward risk at this point. The > > > > > > chart shows no stopping yet, volume is still high > > > > > > and the daily patterns are bearish. The price > > > > > > dropped right through the 200 day EMA (25.85), is > > > > > > below any support on the daily (there looks like > > > > > > some support at $20 on the weekly). If $20 holds, > > > > > > who's interested in buying for a quick off the bat > > > > > > 20% loss? > > > > > > > > > > > > I don't actually see why $20 should hold for > > > > > > more than a pause, anyway. To me there's no sense > > > > > > in looking for "bad news," it's all in the chart > > > > > > right now. > > > > > > > > > > > > JMHO, > > > > > > > > > > > > DMC > > > > > > > > > > > > > > > > > > > > > > > > ----- Original Message ----- > > > > > > From: Gene Ricci > > > > > > To: canslim@lists.xmission.com > > > > > > Sent: Saturday, July 26, 2003 6:30 PM > > > > > > Subject: [CANSLIM] HITK > > > > > > > > > > > > > > > > > > If you still own HITK there may be a light > > > > > > in the tunnel. Change Wave (Tobin Smith) sent an > > > > > > alert to his 300,000 (?) subscribers to buy HITK on > > > > > > 7/25. Looking at the chart shows that the price > > > > > > dropped down and stabilized at its 200-day moving > > > > > > average at $23.14 before bouncing higher. It closed > > > > > > at $24.88 on 7/25. Other than a possible shortfall > > > > > > because of seasonal cough medicine sales I couldn't > > > > > > find any other bad news. Anyone know of any other > > > > > > issues? > > > > > > > > > > > > Thanks, > > > > > > Gene > > > > > > > > > > > > I was forwarded the following; > > > > > > > > > > > > A price under $25 is a great entry point > > > > > > for this dual > > > > > > generic/diabetes play -- forget the noise > > > > > > from the momentum > > > > > > buyers-turned-sellers. They were cleaned > > > > > > out with the huge volume > > > > > > sales, so now it's time to build or add to > > > > > > your positions to get to > > > > > > a $25 cost basis. I still think we can > > > > > > hold on for a $50 value at > > > > > > the end of 2004 on $2 per share earnings > > > > > > in 2004. > > > > > > > > > > > > Let's lower the buy under for HITK to $25. > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > __________________________________ > > > > > Do you Yahoo!? > > > > > Yahoo! SiteBuilder - Free, easy-to-use web site design software > > > > > http://sitebuilder.yahoo.com > > > > > > > > > > - > > > > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > > > > -In the email body, write "subscribe canslim" or > > > > > -"unsubscribe canslim". Do not use quotes in your email. > > > > > > > > > > > > - > > > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > > > -In the email body, write "subscribe canslim" or > > > > -"unsubscribe canslim". Do not use quotes in your email. > > > > > > > > > - > > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > > -In the email body, write "subscribe canslim" or > > > -"unsubscribe canslim". Do not use quotes in your email. > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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