Market Talk with Piranha is currently moving to its new home at chrisperruna.com. The new site is up and running but many of the posts need editing as the images and stock charts did not transfer successfully (thanks blogger). I will post all new entries to both blogs – Thank you for your patience while I make this change!

Wednesday, October 13, 2004

Update on DWSN - Use those Stops

DWSN was crushed today on large volume. I speak about using stops in the Philosophy and Education section of the site. I specifically stated this in my post from yesterday. A lesson to anyone that broke the rules today:

This is why we keep "stops" when we are not sure of the pattern or not sure of the general market environment! I stated the "stops" specifically for this reason. I also stated how the new formation did not have "a handle". In some cases, handles don't form after the cup but a breakout is that much more convincing after a proper handle forms, especially in a second stage base or later.

I hope anyone that owned DWSN, followed the rules and used a stop.

Getting stopped out from my original buy point would still leave you with excellent gains. A stop on the most recent pattern would most likely leave you with a small loss - a small price to pay for insurance.

Piranha

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