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Former Long Position -
CAH
Step numbers referenced below are referring to
Tutorial Steps.
If you need help with terminology refer back to that Step of the Tutorial or the
FAQs associated with that Step.
Special Commentary: Sometime between the market closing bell on June 30, 2004 and
the opening bell on July 1, 2004, a sell-panic ensued among some holders of this
stock. We do not participate in panic-sell-offs or speculative bargain-hunting
buy-ins in such situations -- we simply stick to our methodology. See how we
handle an individual stock panic at Action 5) - 7/4/04, Action 6) -
7/11/04, and Action 7) - 7/18/04, below.
Action 1) - 6/22/03:
Step #1 - NYSE registered a Stage 3 - Bull Market.
 Step #3 - Received the Buy Configuration Signal on CAH
(click on Configuration
Chart, to the right). We executed the Buy. Initial Sell-Stop is established off the
valley-bottom resistance points which are below the 30wk moving average. Risk
Corridor is within our comfort zone at 19.9% (see Action History Chart, below).
Action 2) - 11/2/03:
Step #4 - Received confirmation of the 8/1/03 ($56.10) and 9/5/03
($56.36) valley-bottoms which we rounded down to $56 to establish a new
Sell-stop level (see Action History Chart, below).
Action 3) - 2/8/04:
Step #4 - While we did not receive a real confirmation of three
descending closes from the apparent hilltop at 12/12/03 ($63.73), we are
naming 1/2/04 ($59.68), 1/9/04 ($60.05), 1/16/04 ($59.97) a valley-bottom
which has been confirmed by three consecutive ascending closes as of 2/6/04.
It was very tempting to establish the new Sell-stop level at $60 and tie its
future movements to the 30wk. However, we rounded the 1/2/04 through 1/16/04
valley-bottoms to $59 as a newly established Sell-stop level (see Action
History Chart, below).
Action 4) - 6/13/04:
Step #4 - While we did not receive a real confirmation of three
descending closes from the apparent hilltop at 5/7/04 ($75.54), we are
naming 5/21/04 ($66.70), a valley-bottom
which has been confirmed by three consecutive ascending closes as of 6/11/04. Since
the 5/21 valley-bottom is above the 30wk moving average, we adjust
the Sell-Stop to the 30wk level at $66. From this point forward, Sell-Stops
are adjusted upward in $1 increments in tandem with the 30wk (see Action
History Chart, below).
Action 5) - 7/4/04:
Step #2 - CAH closed at $51.78 on Friday, July 2, 2004. Since this is
below our Sell-stop level of $66 this represents a Sell-stop violation. As it
is CAH's first Sell-stop violation, in a routine move to limit our risk, we
Sell half of our position, resulting in a
loss of 21.8%. Half of our original position in this stock is still
alive (see Action
History Chart, below).
Action 6) - 7/11/04:
Step #2 - CAH closed at $48.94 on Friday, July 9, 2004. Since this is
below our Sell-stop level of $66 this represents a Sell-stop violation. As it
is CAH's second Sell-stop violation, we
Sell half of our remaining position, resulting in a
loss on the transaction of 26.1%, for a cumulative loss on the closed portion
of this issue of 23.2% . One-fourth of our original position in this stock is still
alive (see Action
History Chart, below).
Action 7) - 7/18/04:
Step #2 - CAH closed at $50.45 on Friday, July 16, 2004. Since this is
below our Sell-stop level of $66 this represents a Sell-stop violation. As it
is CAH's third Sell-stop violation, we
Sell the entire balance of our remaining position, resulting in a
loss on the transaction of 23.8%, for a cumulative loss on the closed portion
of this issue of 23.4% (see Action
History Chart, below).
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