Nicely played Abe!  Did you happen to take profits on DDD's recent climax run which, until perhaps this week, ended better than most (i.e., it did not suffer the average -72% drop post climax).  I have been trying to find an historical model stock of a similar climax run to DDD's,  which, though it corrected after topping, did not collapse, yet.  Any ideas? Brad

ILMN shows similar action

Brad, I wish I had gotten into this recent burst.  I didn't get this one, just noting how we could use the rules in the book to exit quite profitably.  It may not have been the most dramatic climax top, but it did meet a couple of the conditions Bill O'Neil describes on page 263.  Mainly it is important to note that it did not quite trigger the 8 week hold rule and then climactic eight of ten days up with the exhaustion gap was the time to sell.

DDD also had eight of ten days up and largest daily price run up back on 11/11/2013.  That area was the bulk of the run up.

DDD also had eight of ten days up and largest daily price run up back on 11/11/2013.  That area was the bulk of the run up.

Abe,  I was not long DDD or XRS during their climax runs but anytime I have sold during what I perceived to be a climax run, it was always based on the run meeting many, but not all, of the characteristics.  Brad

after strong support at the 50 day and today's action I'm not convinced this is a climax top yet.  you definitely could have sold into strength however, I got lucky and did on the 26th.  this is a pretty young stock.  It only recently got over it's 2nd trading week high and it nearly qualified as an htf. it's Chinese so it will remain very volatile and should go higher...  if the market recovers.  today's leader action is pretty strong..

my biggest point is that I'm not sure the stock has been in a long enough run yet..  of course a run of "many months" is probably open to opinion as to how long that needs to be.

my biggest point is that I'm not sure the stock has been in a long enough run yet..  of course a run of "many months" is probably open to opinion as to how long that needs to be.

Geo_Effect,  I agree.  ILMN is showing multiple signs of climaxing, including an exhaustion gap.  The rest of this week and next's trading should prove interesting.  Brad

I also agree on ILMN.  thanks guys.

Geez, Not that important but in the interest of clarity I sold XRS on the 21st.

With market down for 5 day in a row. Do you guys sell the stock below 50 day or 8 to 10 % rule?

With market down for 5 day in a row. Do you guys sell the stock below 50 day or 8 to 10 % rule?

HTMMIS Page 263 climax activity does not necessarily mean the end of the run.  If the stock is coming out of the a first stage base, I have seen that 2 aspects of CAN SLIM page 263 climax activity after the 8 week hold period coming out of a first stage base, is usually enough to send a stock into its page 272 "first short term correction of 10% to 20%" or a shallow second stage base.  

For example see FB on 9/26/2013 eight of ten days up and a small exhaustion gap; LNKD on 4/30/2013 eight of ten days up and a small exhaustion gap; TSLA 8/26/2013 seven of eight days up and breaking through a shorter upper channel line. SFUN 1/7/2014 largest daily price run up, breaking a shorter term upper channel line. JAZZ 8/29/2013 eight of ten days up and a tiny exhaustion gap.

Maybe we use the recognition of the early climactic activity to take a some profits, or maybe we use it to brace ourselves emotionally as the next six or eight weeks are very likely to be choppy as the rapid gaining stock needs to test its support.

Given the current market action I actually use both methods(whichever comes first).

On breaks of the 50dma (But not an 8% loss) there's 2 things I can do.

1. If the stock breaks the MA very hard I will unload the position there.

2.If the stock breaks the line but on a fairly mild loss (everyone has different opinions on what's mild or not, depends on your risk tolerance and judgment) I will wait for a confirmation on the MA violation.If the next day the stock undercuts the intraday low of the initial break that is my signal to sell.I prefer the stock to actually close below  the intraday low.

As far as my 8% sell rule.Any stock that triggers it no matter where it is trading, I sell.The way the market is behaving as of recent I would not even wait for 8%.I would cut at about 5%.

Great discussion guys!  I have nothing to add to Geo_Effest & Abe's comments except that my selling "rules" closely follow Geo_Effects assessment.  Always remember that if the market appears near to rolling over (numerous clustered distribution days as we've been living with) and your growth leaders are starting to act wobbly, don't wait for -8% loss.  Ideally, get out while still holding some gain, or, if you can't, get out at -3, -5, -6% rather than waiting and losing more.  You can always buy them back.  Brad

Great running dialog by all. Nice breakdown on climax runs and when they occur Abe.

Well done Abe!