Former Long Position - SYK
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.
You have seen this one in our Portfolio before. You will find it listed among
our 2003 Former Holdings. We added SYK to the portfolio this time because we like the looks of both
the Configuration and Action History charts and at this price, a nice moderate Risk Corridor. In addition, they offer an
important product.
Action 1) - 1/30/05:
Step #1 - NYSE registers a Stage 3 - Bull Market.
 Step #3 -
SYK flashes a Buy Configuration Signal
(click on Configuration
Chart, to the right). We execute the Buy. Initial Sell-Stop is established off the
valley-bottom resistance points which are below the 30wk moving average. Risk
Corridor is a moderate 14.5% (see Action History Chart, below).
Action 2) - 4/24/05:
Step #4 - The closing price for SYK on 4/22/05 is observed to be the
third subsequent ascending closing price since 4/1/05. Thus, the 4/22 close
serves as a confirmation that the 4/1 close of $44.15 was a Valley-bottom and
suitable to serve as a marker for a Sell-stop. Since the 4/1 close is below
the 30wk moving average, we use the actual close value for guidance in
establishing the Sell-stop: $44.15 rounded down to $44. We will await the next
SYK Valley-bottom to trigger the next Sell-stop adjustment.
Action 3) - 10/23/05:
Step #2 - 1st Sell-Stop violation - SYK closes on 10/21/05 at $40.94
which is below our established Sell-Stop level of $44. We execute a Sell of
half of our position at a 14.9% Loss. Half of our original position is still
alive (see Action History Chart, below).
Action 4) - 10/30/05:
Step #2 - 2nd Sell-Stop violation - SYK closes on 10/28/05 at
$41.50 which is below our established Sell-Stop level of $44. We execute a
Sell of half of our position at a 13.7% Loss, bringing our cumulative Loss on
the closed portions of this former holding to 14.5%. One quarter of our
original position is still alive (see Action History Chart, below).
Action 5) - 11/6/05:
Step #2 - 3rd Sell-Stop violation - SYK closes on 11/4/05 at $43.07 which is below our established Sell-Stop level of $44. We execute a
Sell of the entire balance of our position at a 10.4% Loss, bringing our cumulative Loss on
the closed portions of this former holding to 13.5% (see Action History Chart, below).
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