Former Long Position - ROK
Action number references are to actions shown
on the Action History Chart at the bottom of the page.
Step number references are to Tutorial Steps.
If you need help with terminology refer back to that Step of the Tutorial or the
FAQs associated with that Step.
We added this one to the portfolio because we like the looks of both
the Configuration and Action History charts, it has a moderate Risk Corridor,
and it looks like it is ready to break-through its historic high.
Action 1) - 11/20/05:
Step #1 - NYSE registers a Stage 3 - Bull Market.
 Step #3 -
ROK 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 12.7% (see Action History Chart, below).
Action 2) - 4/23/06:
Step #4 - Observations: This stock has risen in price by over 50%
since we established the initial Sell-stop level back in November. While we
have seen four cyclical pauses in the upward movement, none of the pauses have
qualified by definition as a valley-bottom. This has kept us from advancing
the Sell-stop level.
At this point, we are declaring a move of the Sell-stop level to correspond
with the 30wk moving average at $63.15 rounded down to $63. From this point
forward, Sell-Stops are adjusted upward in $1 increments in tandem with the
30wk (see Action History Chart, below).
Actions 3) through 5):
Step #4 - Sell-Stop adjustments in tandem with the 30wk moving
average (see Action History Chart, below):
3) 5/7/06: 30wk = $64.63 rounded down to $64
4) 5/14/06: 30wk = $65.30 rounded down to $65
5) 5/28/06: 30wk = $66.34 rounded down to $66
Action 6) - 6/11/06:
Step #2 - ROK closed at $65.50 on Friday, June 9. Since this is
below our Sell-stop level of $66 this represents a Sell-stop violation. As
this is our first Sell-stop violation with ROK (i.e., Strike One), we
Sell half of our position. This transaction results in a gain/positive ROI of
13.9%, locking-in an annualized rate of return of 25.1% on the closed portion
of the position. Half of our original position is still alive (see Action
History Chart, below).
Actions 7) through 8):
Step #4 - Sell-Stop adjustments in tandem with the 30wk moving
average (see Action History Chart, below):
7) 6/18/06: 30wk = $67.40 rounded down to $67
8) 7/2/06: 30wk = $68.24 rounded down to $68
Action 9) - 7/23/06:
Step #2 - ROK closed at $65.83 on Friday, July 21. Since this is
below our Sell-stop level of $68 this represents a Sell-stop violation. As
this is our second Sell-stop violation with ROK (i.e., Strike Two), we
Sell half of our remaining position. This transaction results in a gain/positive ROI of
14.5%, locking-in an annualized rate of return of 23.9% on the closed portion
of the position. One-fourth of our original position is still alive (see Action
History Chart, below).
Action 10) - 7/30/06:
Step #2 - ROK closed at $62.53 on Friday, July 28. Since this is
below our Sell-stop level of $68 this represents a Sell-stop violation. As
this is our third Sell-stop violation with ROK (i.e., Strike Three), we
Sell the entire remaining balance of our position. This transaction results in a gain/positive ROI of
8.8%, locking-in an annualized rate of return of 21.5% on the closed portion
of the position (see Action
History Chart, below).
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