Hi Alex,
WOW! To be a God-Son of the Top Man in AMAT is really WOW!...
Alex, I'm not really a "sage." My wife even tells me that I'm bad in Selling (at times when AMAT Dips 20% and my Options Dip 66%). But...looking at the way Margarita welcomed me back after a 2-day absence from the thread with--- "WELCOME BACK!!!!!!" I can't help but wonder if I'm becoming a "rage" among fellow threaders...Although not experienced in setting stop Orders, maybe I can help you by pointing out some "habits" of AMAT:---
The stock, trades about 2 to 3 dollars (about 2 to 3% from the day's high to the day's low) on most occasions. During Up-staircase moves, the stock hits a new High then Dips 3 to 7% that takes about 4 days--- only to rise up to new Highs and repeat the process over and over again, setting up Risers and Steps. When the stock Dips about 10%---it's a signal for a staircase-landing phase ( or pause or consolidation or sideways pattern, etc) wherein the stock Dips down to 20% +/- and remains in a trading range (1 to 3 months) as investors wait for some good news to come. Many stocks like NVLS, LRCX, KLAC, LSI Dip more than 25% and come back as if nothing happened; but not AMAT:---if we see the stock Dips 25% and do not bounce back in a hurry---then something serious is the matter. 25% could easily become 50% and more. The Over-all Market, as measured by the DOW 30 could Dip 10 to 20% in that regard...
I think Stop Loss orders should be Re-Set as often as the stock hits New Highs. During Up-staircase moves, setting the Stop at 4% (from the latest New High) then buying back around 7% is a good way to do it. It really depends upon how one thinks the market is going. If I have to do it: ---set some at 4%; ---some at 11% to be bought back at around 15% in case the stock is in a Landing mode; ---the rest probably at 21% in anticipation for a 25 to 50% or worse...
Alex, take a cue from your God-father, always have Cash for the Dips!... |
