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Strategies & Market Trends : Pitbull Investing Strategies
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To: Ralph Garcia who wrote (151)6/12/1997 8:47:00 PM
From: John Langston   of 789
 
Ralph: The basic sell criteria is as follows:

1. Sell when WEEKLY RS drops MORE than 5-points from its highest since purchase. Obviously, the lowest RS allowed for an initial purchase is 75.

2. Sell if daily CLOSING price hits trailing stop. The trailing stop varies based on price at purchase:

$5 to $10 = $2 trailing stop
$10 to $20 = $3 trailing stop
$20 to $30 = $3.50 trailing stop
$30 to $40 = $4 trailing stop
$40 to $50 = $5 trailing stop
Above $50 = 7-10%, your choice.

You'll notice that $5-$10 stocks are given a 20%-40% range; $10-$20 stocks a 15%-30% range, etc. CANSLIM criteria calls for a 7-10% trailing stop. Henry alters it for stocks under $50. Its your choice, but I follow it verbatim.

The >70 RS number is a misnomer, I think. You wouldn't want to buy @ 70, then sell @ 69.

Hope this helps. I wasn't using the trailing stop in April and most of May and it cost me i.e. OFCP as referred to in an earlier post.

John
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