This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I got the idea for Deckers Outdoor Corporation (NASDAQ: DECK) from the Motley Fool boards.
1. Why did I take this trade?
I still have a soft spot in my heart for breakouts, even though this market environment has changed. Plus, DECK behaved relatively well enough on the daily charts. On Monday, I bought when it broke above 68, @68.05 .
2. What was the initial stop?
This part was more an art. I placed an alert if DECK dropped below 67.5, and did not watch it for the rest of the day. When the alert went off just before market close, I took a look at it, but decided not to sell, because I believe that the uptrend was still intact, and that this was noise.
I reviewed the chart only once (on Wednesday) after the initial buy, and moved the stop up to just under 68.
3. Why did you exit where you did?
I got worried about the market’s down move on Friday and started watching DECK a bit more. I sold when I saw it drop below 69. Plus, I just didn’t feel comfortable holding it through the weekend.
4. Is there anything you would do differently?
I still haven’t gotten into the habit of working out a profit target. Stocks tend to have an affinity for whole, integer numbers as support/resistance levels, and DECK was no exception. Recognizing this sooner would have helped me to sell @70, or just continue holding.
I should also review the chart of a swing holding at least once per night, because you just never know.
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| DECK |  |  |  |
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
March 10th, 2007 at 12:48 pm
This is something I see all the time, and I’m not sure what’s the right conclusion to make. But, here’s a case where you could have gotten out after 45 minutes for the same gain you eventually made several days later. It seems like, when I wait for a clear, confirmed reversal, or use a trailing stop, it eats up so much in gains that I’m just as well off selling into the first big surge. So, most of the time that’s what I do. I know there have been cases where the stock went on to run without me, but I also know there have been lots of cases where I won instead of lost due to this strategy. So, it’s not clear to me which method is better.
On the post itself: There were weird tags in the headings, which I stripped out. And, try not to put the chart image inside the first heading, as it causes the formatting to go wonky.
March 10th, 2007 at 2:44 pm
@Richard: Yeah, I was thinking about that too - after I had sold! There’s often a pullback after a big surge like the one on Monday. The pullback would have offered me plenty of chance to get back in. I’ll have to keep that in mind for the next trade.
March 12th, 2007 at 12:59 pm
[...] may have seen a comment I put on one of Phileo’s recent posts, where I talk about selling into the first surge on the stock. This is another example of how I [...]