Former Long Position - TXT
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 recent high. We also
like the Cessna product line.
Action 1) - 12/11/05:
Step #1 - NYSE registers a Stage 3 - Bull Market.
 Step #3 -
TXT 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 very moderate 16.6% (see Action History Chart, below).
Action 2) - 2/19/06:
Step #4 - A valley-bottom at 1/20/06 is confirmed as
the third subsequent increase in price which occurs as of market close on
2/17/06. Since the 1/20 valley-bottom is above the 30wk moving average, we
adjust the Sell-Stop to the 30wk level at $75.47 rounded down to $75. From this point forward,
Sell-Stops are adjusted upward in $1 increments in tandem with the 30wk (see
Action History Chart, below).
Actions 3) thru 13):
Step #4 - Sell-Stop adjustments in tandem with the 30wk moving
average (see Action History Chart, below):
3) 3/3/06: 30wk = $76.44 rounded down to $76
4) 3/19/06: 30wk = $77.64 rounded down to $77
5) 3/26/06: 30wk = $78.42 rounded down to $78
6) 4/2/06: 30wk = $79.15 rounded down to $79
7) 4/16/06: 30wk = $80.49 rounded down to $80
8) 4/23/06: 30wk = $81.25 rounded down to $81
9) 5/7/06: 30wk = $82.70 rounded down to $82
10) 5/14/06: 30wk = $83.55 rounded down to $83
11) 5/21/06: 30wk = $84.19 rounded down to $84
12) 6/4/06: 30wk = $85.60 rounded down to $85
13) 6/11/06: 30wk = $86.00 (no rounding required)
Action 14) - 6/18/06:
Step #2 - TXT closed at $85.74 on Friday, June 16. Since this is
below our Sell-stop level of $86 this represents a Sell-stop violation. As
this is our first Sell-stop violation with TXT (i.e., Strike One), we
Sell half of our position. This transaction results in a gain/positive ROI of
9.8%, locking-in an annualized rate of return of 19.7% on the closed portion
of the position. Half of our original position is still alive (see Action
History Chart, below).
Actions 15) & 16):
Step #4 - Sell-Stop adjustments in tandem with the 30wk moving
average (see Action History Chart, below):
15) 7/2/06: 30wk = $87.03 rounded down to $87
16) 7/30/06: 30wk = $88.58 rounded down to $88
Action 17) - 8/13/06:
Step #2 - TXT closed at $86.50 on Friday, August 11. Since this is
below our Sell-stop level of $88 this represents a Sell-stop violation. As
this is our second Sell-stop violation with TXT (i.e., Strike Two), we
Sell half of our remaining position. This transaction results in a gain/positive ROI of
10.7%, locking-in an annualized rate of return of 17.9% on the entire closed portion
of the position. One-fourth of our original position is still alive (see Action
History Chart, below).
Action 18):
Step #4 - Sell-Stop adjustments in tandem with the 30wk moving
average (see Action History Chart, below):
18) 8/2006: 30wk = $89.70 rounded down to $89
Action 19) - 8/27/06:
Step #2 - TXT closed at $85.00 on Friday, August 25. Since this is
below our Sell-stop level of $89 this represents a Sell-stop violation. As
this is our third Sell-stop violation with TXT (i.e., Strike Three), we
Sell the entire remaining balance of the position. This transaction results in a gain/positive ROI of
8.8%, locking-in an annualized rate of return of 16.5% on the entire position (see Action
History Chart, below).
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