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Dave,
Thanks for the comments. I'm definitely going to tighten stops
instead of getting out when targets are hit. Tightening based on a shorter
term trend channels makes more sense to me than basing the stops on trailing
lows. I definitely should have thought of that myself <G>. Thanks again,
I'll play with the idea.
JimG
-----Original Message-----
From: DUGGAN DAVID <metardr@xxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Tuesday, April 13, 1999 8:30 PM
Subject: Re: Weekly Pick
>I like to use a trend line to exit. If the stock breaks below the trend
>I sell it.
>If the trend gets steeper, go with it and enjoy the ride.
>
>When exiting a blow-off top (a sharp peak starts to develop - fast up
>followed by fast down) I watch the volume by the hour. When the stock
>looks like it has peaked and volume per hour declines the ride is over.
>
>I have used this method successfully to exit at or near the peak of some
>multi-week runs and it feels good when it is well executed.
>
>I believe this is how to execute good money mgmt as well. Cut the ones
>that move against you and ride the winners.
>
>Depending on how often you like to trade the trend line could be drawn
>on the lows of each day(read as a 3 to 8 day run), or the lows of a
>longer term channel (read as a 3 month run). (I have probably
>infuriated a TA purist with this last comment!)
>
>Obviously if you were day trading a different method of exiting would be
>appropriate.
>
>OBTHW I like your articles Jim and someday I am going to go back and
>read the ones I missed.
>I have missed more than I have read - my loss. Your theory and
>selection process and is similar to mine.
>
>Dave
>
>Jim Greening wrote:
>>
>> All,
>> A busy week with a lot of portfolio changes. I opened a FDX
position
>> Monday. I was stopped out of NSOL Monday, SCH hit my target Tuesday, and
>> both RDC and SLB were stopped out on Wednesday. Finally I opened a C
>> position Thursday. Even with all those changes, it was a good week for
my
>> portfolio.
>> We're going on vacation Friday to see my parents in Texas and spend
>> some time at the beach on South Padre Island so there won't be a weekly
pick
>> the next two weeks. This week I want to add another market leader
momentum
>> type stock. I narrowed my list to Home Depot (HD), WalMart (WMT) and
>> WorldCom (WCOM). I finally decided on HD because they are entering their
>> prime spring sales season which I think gives them a little better short
>> term potential.
>> HD at 67.31 is broke out of a small, month-long cup formation on
good
>> volume to a new all time high Friday. This is a classic CANSLIM type buy
>> signal. It's in a long, intermediate, and short term up trend channel.
The
>> Intermediate Term Up Trend Channel (ITUTC) is a Trader Vic type channel
with
>> the bottom formed from the 10/8/98 low to the 4/5/99 low and extended to
the
>> right. The top of the ITUTC was made by drawing a parallel line through
the
>> 12/30/98 high. The top of the ITUTC is at 78.32 and the bottom is at 61.
I
>> drew a standard deviation Short Term Up Trend Channel (STUTC) from the
>> 4/5/99 low to Friday's high and the bottom with a deviation of 1 is at
65.
>> The Binary Wave Composite is barely positive and flat, the QStick is more
>> positive and rising slightly rising. That's bullish, but not strongly
>> bullish. The fundamentals are good with the price/sales 3.48,
debt/equity
>> at 0.16, ROE at 19.4%, 25% annual sales growth and 35% annual earnings
>> growth. I'll open a position Monday. I'll set my target just under the
top
>> of the ITUTC at 78 and my stop just under the bottom of the STUTC at 64
3/4.
>> Speaking of targets, I'm thinking about changing my system slightly.
>> The last several stocks that I've closed when they hit their targets have
>> gone on to much higher levels. They have either gone on up by
paralleling
>> the top of their channel or have broken out of their channel to set new
>> steeper channels. I want to take a profit near the target if the stock
does
>> turn down, but still allow it to run if it continues higher. What I'm
>> thinking about is instead of closing the position, I'll just tightening
my
>> stop to a trailing three day low and stay in the position until the stop
is
>> hit. If the stock does go on to set a new steeper up trend channel, I'll
>> eventually revert to a target and stop based on the new channel. Any
>> comments?
>>
>> JimG
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