Paper Consolidation Trading Journal

[almx]

As my trades take months to complete and my capital being currently fully allocated, I will paper trade in this journal to continue my learning and collect statistics.

I will do the same due diligence as if these were real trades, it would make no sense otherwise.

I currently have 2 watch lists, Confirmed CANSLIM Stocks and Challenger CANSLIM Stocks, where I search for stocks to trade when I think they approach the end of a consolidation period and are ready to break out, I do exactly the same for my real trades in my other journal.

 

[almx]

1. QUIK - QuickLogic Corporation

So here we go with the first one.

This one comes from the Challenger list, it had a bad recent quarter EPS but all the other numbers seem good or improving.

Technically, the trend is young, only 261 days and it's in a consolidation of more than 3 months now during which volume has been decreasing. It has broken a small 10 day base with some volume and this was the reason to enter.

Entry Long at 10.75, Stop loss at 10%

 

[almx]

2. PLAB, Photronics Inc.

A challenger also as it has good numbers except last quarter with -11% growth.

Same consolidation characteristics setup as the previous one and same entry reasons.

Entry Long at 25.50, Stop loss at 10%

 

[maxinger]

1. QUIK - QuickLogic Corporation

So here we go with the first one.

This one comes from the Challenger list, it had a bad recent quarter EPS but all the other numbers seem good or improving.

Technically, the trend is young, only 261 days and it's in a consolidation of more than 3 months now during which volume has been decreasing. It has broken a small 10 day base with some volume and this was the reason to enter.

Entry at 10.75, Stop loss at 10%

You should have shorted QUIK a few weeks earlier when the highs are getting lower and lower.

Now it is rather late to short it.
You could have shorted it at 14.5 or 13 rather than at a lousy price of 10.75

Some traders waited for the 11.3 neckline to be broken
before shorting QUIK.

Target profit could be at 9,
followed by 5.
And finally 0.

The peak price was 625. Now ~10.
It must be a not-so-well-managed company.

 

[almx]

You should have shorted QUIK a few weeks earlier when the highs are getting lower and lower.

Now it is rather late to short it.
You could have shorted it at 14.5 or 13 rather than at a lousy price of 10.75
.

It's a long position...

 

[Darc]

@Rams Fan is your Man on here for CanSlim. He knows more about CanSlim than O'Neil did .. RIP

Did you know O'Neil didn't write How to Short Stocks? Chris Katcher actually ghost wrote it.

Good luck.

 

[tomkat22]

So do you plan on holding these stocks for 40 years until you retire? I dont see any mention of an exit strategy,profit target,trailing stops,play-it-by-ear,etc.

 

[almx]

So do you plan on holding these stocks for 40 years until you retire? I dont see any mention of an exit strategy,profit target,trailing stops,play-it-by-ear,etc.

In 40 years I will certainly be dead so I hope I can exit before that, lol.
You are right, there is nothing here but don't worry, I have it all, it's just not exposed here.

What I can say, 1st, it's not buy & hold strategy, 2nd, I should exit if they go 10% against my entry price, 3rd, I will try to get out at 3 to 5 times my risk but 2 could also be okay if they don't want to give more or if the overall market goes down and finally that I expect to reach my target in 3-6 months window.

 

[tomkat22]

Fair enough. I've never researched the CANSLIM system so I was curious as to where the proponents of that system exit a trade on the upside.

 

[almx]

Fair enough. I've never researched the CANSLIM system so I was curious as to where the proponents of that system exit a trade on the upside.

The CANSLIM is mainly to have a pool of stocks that are solid and trending in a bull market, trying to put more chances on my side when I enter, then I solely play any consolidation in that up trend, that's all.

Here is a "book" example of what I mean, Arista Networks, a perfect CANSLIM stock with a strong up trend since 2023 with pullbacks to the 150 day EMA, some were tradeable, some other not unless you were only going to buy and hold...