Quote from smtrader:
Looks to me like, that at the time of signal generation, MFLX was already up 11% on the day. I know you to typically be extremely risk adverse, and although this stock didn't gap up, it did rise in price considerably from last nights close.
While MFLX had already improved in price by 11%, the price appreciation occurred over time. Unlike gapped stocks (that often fill retreating back from their gap open price) gradual price improvement often continues for a few days if volume levels support such price increases.
Quote from smtrader:
What were your thoughts when you entered the trade? Personally, I am surprised you took the trade, so I would be interested to get your insight.
Because price had already moved a great deal, I didn't anticipate reaching the target price of 10% gain. However, I anticipated price continuing to rise providing a smaller gain. Now, I don't mean to say that I think price
won't make the full 10% - just that I didn't anticipate it doing so. In addition, by moving my stop intraday yesterday with the MIPS short, price crossing my stop price caused me to miss out on the full run. As a result, I decided not follow the price up as closely today allowing a little more "wiggle room."
Quote from smtrader:
Also, I have noticed that a few of the stocks in your universe are currently unranked using the Hershey Equities Rank 2.0.1. MIPS is a good example of this, an unranked stock that you took a trade in.
I don't immediately delete each stock that loses its rank. Often a stock that loses a rank resumes its ranked status after a few days. Although not the case with MIPS, 'tenured stocks' remain in the list even without rank. We have a few other examples of stocks that will probably get the axe very soon. TASR with its recent earnings miss (currently listed as nil) and LCBM with lower than desired average daily volume are two examples of such stocks. I keep them around a while just to make sure.
Quote from smtrader:
You indicate that aside from using WL to calculate rank, you use a "manual" method... can you go into this and why it is different? Are you allowing some tolerance levels to the 20% rule? This is assuming that you track rank daily (give or take a day or two) and would eliminate a stock as soon as it becomes unranked.
Earlier in the Journal, I posted dkm's Assessment Sheet for use with manually calculating rank. An additional copy can be found at the MSN
Jack Hershey Strategies Web Site. I use the manual method less frequently now (only rarely). Occasionally, a manual method indicated a rank, while the Wealth-Lab Method did not (or vice-versa). The differences arise from how The Wealth-Lab Chartscript calculates a 20% gain (low to high). The 20% rule is a 'minimum' gain we look to see. Greater than 20% is always nice. Because a stock might resume its ranked status within a few days of losing its rank, I now drop the unranked stocks (unless they have 'tenured' status) at the end of each month. So, while MIPS no longer had a rank, it still had a spot in the Final Universe List. As a result, it still had trade eligibility.
Quote from smtrader:
Thanks again, and good luck on the MFLX trade.
Thank-you, I may need it. The indicators didn't provide me with a conclusive signal, and as a result, I went with the majority and held. I hope you find the above information useful.
- Spydertrader
