From the Trading Desk

SSYS 12-17-02 to 10-14-03

SSYS was one of the early breakouts that went on to produce some very strong gains. Everything about this stock was right on the technical and fundamental. Therefore, when you see the patters below, and you see the strong EPS and sales numbers, it is foolish to not grab yourself a healthy amount. By the time the near ten month run was over, SSYS produced a huge 548% gain from the first purchase. My final purchase at the end of February even produced a still very impressive 386% gain in seven months and two weeks. This was in fact a ‘monster stock.’

first buy:

ssys12_17_02__Large_.PNG

second buy:

ssys12_18_02__Large_.PNG

the big buy:

ssys1_2_03__Large_.PNG

small pyramid buy:

ssys2-20-03 (Large)_1.PNG

my final pyramid:

ssys2_28_03__Large_.PNG

my first large sell:

ssys4_23_03__Large_.PNG

second sell:

ssys5_19_03__Large_.PNG

the top:ssys10_14_03__Large_.PNG

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Comments

  1. Dave Hyde says:

    There are so many big winners I’m not sure if questions will get answered since you might not be able to find them in the pile, but I’ll try anyway.

    Thanks for posting these. I’ll be trying to build my own easy scans using what I see in your charts. On this one it looked like 50 crossed 200 to go above it, and BOP was pretty much max green, plus of course the volume spike.

    When the stock pulled back and closed below its 50DMA a couple of times around mid February, did you elect not to sell because the volume was low? I guess this would be what IBD would call a base?

  2. No no. I did take off 25%. But as soon as it broke out back over the 50 DMA on that huge volume, it was clear to get back long. And then it let me know right after that that I was right. The fundamentals and technicals were fantastic. There were a lot of stocks then looking nice but this one stood out because of the flatness of the base, the low volume in the base, the perfect bounce/breakout that followed on strong volume, the previous utprend going into the base being on green BOP with a ton of accumulation. This chart was hot. A lower volume break below the 50 DMA didn’t scare me AT ALL.

    You are right. This is a perfect base. Notice it hugs the 50 DMA and does not breakdown or fail at the 50 DMA? That is very bullish construction.

    There are many more still to come :) Enjoy. It will be another month before we can even think of getting out of 2003. I had over 60 stocks that were big winners with HOT green charts during that time and am only 1/2 way done. LOL. When we get to 2004 it will start slowing down coming to a screeching halt after April 2007. Wonderful how the chart patterns were there until about six to seven months before the “real and final” top. The stocks within the market, that are leaders, always seem to top before the actual indexes. This was just yet another hint, when my HOT HOT HOT charts stopped showing up and working (if they did show up), that something was changing.

  3. Anindo Majumdar says:

    Hi

    Great idea to post the charts of your former big winners. Another useful addition would be to post some of the fundamentals
    of these winners at the time of breakout. For example what was
    the current quarter EPS, EPS % growth for the last few quarters,
    forward EPS estimates, % sales growth for current quarter, annual
    eps growth for the last 3 years, ROE, Gross profit margins, rank of
    the industry group the stock came form at the time of the breakout.
    Then you could have a scan of stocks with the common fundamentals
    of the great winners and from this universe you pick the charts
    with the best looking BOP or whatever other traits you look for.

    Thanks

  4. Dave Hyde says:

    My thinking about the approach was that you might look for the right chart setups first. This you can do using easy scans looking for accumulation and high BOP. Then for the charts that you like, dig a little deeper on IBD to see if the right CANSLIM values apply.

    I’d be interested to see how others do this.

    Just for kicks let me post what I was looking at earlier. Right now I’ve got some simple things on my easy scan:

    1. Stock up today
    2. 50 and 200 DMA’s moving up
    3. 50 DMA above 200 DMA
    4. 10 day BOP above 75
    5. Volume today 50% above 50 day average

    I’ve got two that show up as OK on a pure chart basis(I think)

    MOC and TCN

    TCN had a recent upturn and has stayed steady for a week. I guess you’d have to wait a few weeks to see if it forms a base. IBD tells me that the EPS has a rating of 29 and a sales/profit rating of E!!
    Better stay away from that one.

    MOC has been tracking along its 10 WMA and I think BOP is skewed to max green because its volume is very low. Its daily action is really choppy and you couldn’t buy that chart.
    For interest, IBD says it has an EPS rating of 74, sales/profit of C and accumulation rating of B-. Its industry group rating is only 119/197, meaning that the market is not buying into this group much.

    I can see Joshua’s point that there are hardly any setups that are good enough, so patience is the key.

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