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!

Tuesday, April 04, 2006

The Breakout of Gehl Co. (GEHL)

This is a question I received about GEHL earlier today:

Chris,

After the big breakout today, GEHL is still within 5% of the pivot
point. Would you recommend taking a position or has the opportunity
passed?

Thanks,
MSW Member

My Answer:
In a bull market, I would say to jump in if interested. In this type of market, I hesitate in giving that recommendation due to the large number of reversals among breakouts. If the stock reverses, you would be forced to sell quicker than usual. The stock is about 2% higher than our targeted pivot point of $35.15; so you are not chasing it too much from the ideal breakout area.

According to the rules (CANSLIM rules), it is still a buy. Place half a position if interested and watch what happens. If it works out, you can always add shares at a later date on a healthy pullback to the moving average. If you buy and it reverses, sell! Don’t worry about being right or wrong, worry about your risk and following the rules. If you follow the rule of cutting losses and letting the profit ride, the trade will take care of itself. Trade the idea and allow the money to do the talking.

Hope this helps,
Chris

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