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Here is one I got stopped out of once it broke through the 50 day.
It seems like a stage 2 flat base formation of 13% depth, which is a common structure after the cup with handle 1st stage.
So in retrospect, I pulled the trigger, but what flaws did I ignore or dismiss?
Despite all this, the stock broke out on very good volume (94% above avg) on May 6th and everything looked fine and dandy until a handle started to form 8% above the breakout. Now usually this is ok but note the increasing volume as the handle forms, which definitely means something is wrong. I missed this completely and didn't get out before the 5/20 meltdown.
It happened so fast I couldn't get off the elliptical fast enough to sell and an IBD friendly loss turned into a 10% loss.
So what's the lesson from this? Was the base too flawed to buy? Maybe, maybe not (opinions would be great!) but Leaderboard was sure into this stock and so was I.
In retrospect, I would've liked to have sold when it plunged below the 10-day May 16th on above average volume, however is this too tight a stop?
So at least I got a bit more slim for my wedding this summer, but now I have to work a little harder to pay for it. ;)
Regards,
Mike
I was in this one too, that downward channel seemed suspicious compared to how other IBD stocks were behaving so raised my stop to 4%. I learned a good lesson from Amba today. When it dropped down into that pivot area I thought It was my opportunity to get in. I even waited for the price to rise before I made my purchase ... two hours later I was stopped out.
Interesting, I bought into AMBA as well and bailed yesterday before it really crumbled.
It's clear this rally is getting old. I'm welcoming a correction to freshen things up a bit.
Thanks for the comment!
I was also in ALK at the breakout. I sold on 5/20 for a 5% loss using the sell rule that it was the largest price drop in biggest volume since ALK's run started in Oct.
Hello. Good analysis. I was stopped out at a 5% loss (thank god for sell stop orders). In my opinion and in retrospect, the base wasnt seriously flawed but was wider and looser than the previous entry points (pullbacks to the 10W and not so surprisingly the tight pattern that formed Jan-Feb of this year). ALK had many, but not all, the trade marks of CANSLIM (shortcomings are evident in revenue/sales and annual EPS growth). What ALK, MDCO and other leaders that were starting to crack days ago provided us was an early exit from a market that is now starting to pull back to some degree. I guess that's the silver lining!
Yes, it was definitely loose action compared to the previous leg. Also I'm not used to seeing flat bases start with an immediate 12% drop on immmmmense volume not seen since November. Would you consider this a flaw as well?
Definitely a sharp drop April 2nd to start the flat base. If you were a holder of ALK up to that point and got in (as add-on or initiation) on the tight pattern in Jan-Feb, for example, the action in ALK was getting a little too exuberant as evidenced by, in my estimation, an upper channel line break on March 20. I'm guessing that was enough to get the big boys to want to take some money off the table and thus, the beginning of the base'ing process. Not necessarily a flaw in my opinion as most bases are started due to some "shock" like earnings misses, market pull backs etc. SAVE isnt having the same technical issues as ALK is but Im not long...yet!
Perhaps we're just too early on this one and the next base will tighten up, hopefully if sales/earnings keep increasing. What's great is that the base count looks like it reset on 5/21 since it undercut the FB low.
Thanks for the great info!