Larry a similar philosophy has worked for me often, but I always add, out a stop loss at least below the last break out. Because this often get you into whipsaws, I have modified the strategy to enter strong stock (that periodically make new highs) on retracement to the last support (usually the last break out, but not always) and then use a stop loss, this way, when I am stopped pout (and unfortunately I am stopped out about 30% of the times before a profit is made (but the profitable trade keep getting their stop losses raised, like MRK were my SL is up to 111 and that is more than a four year run now from the low 40'). I use a similar tactic in weak segments that I think might have a good rally coming (like the semi for the next few weeks despite, or possibly because of Kurlak). With this group I get my head handed to me more often, in a whipsaw fashion. Today I got kicked out of LRCX at 19-5/8, but the pain was not so bad since I just bought it around 20.5, hopping that the support will hold-tough luck). Together with these principles, I am using my turnips' magic powers to let me know if indeed we are getting into a rally or into a dead alley. Right now they are all gang ho for the next four weeks, at least, but come August, they have already notified me to be a little more Jewish (I mean worry a lot (VBG).
Zeev |
