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Written and copyright © 2011 by Thomas N. Bulkowski. All rights reserved.
Teradyne Trade Entry
I show a picture of Teradyne (TER) on the weekly scale. It's a trade for which I was recently stopped out.
I first began having an interest in buying Teradyne in mid April 2009 after price retraced 38% from the move up from the March low. That would have put me into the stock at 4.55.
However, I delayed entry for about two weeks. By then the stock had reached 5.94, the price at which it filled.
As an explanation about the buy, I wrote in my notebook, "Big W, Eve & Eve double bottom. S&P rates this a buy, but with a high risk assessment. Sees a 56% decline in revs in
2009, but a 41% increase in 2010. Ford says sell. This is not a value play."
The bear market had just ended, so buying anything was a high risk proposition (meaning no one really knew if the bear was dead). I saw upside potential of 9 to 12 or even 13.
By the end of June, the rating agencies hardened their stance. I wrote, "6/26/09 S&P strong buy. Says that the worst is behind the company in terms of sales. Has no long term debt.
Expects sales to improve in 2nd half. Ford says strong sell!"
The Teradyne Trade Sale
My notes say that I placed a sell order on April 27, 2010, if the stock closed below 9.93. However, before price dropped that far, I wrote this:
"7/5/10 I placed a limit order to sell at 10.43, GTC. This would match the 38% retrace and is just below a prior gap.
7/8/10 Changed limit order to stop at 9.78
7/12/10 Stop raised to 10.05 a few pennies below today's low.
7/13/10 Intel has had the best quarter in a decade, so this will probably do well. I'm canceling the stop.
9/25/10 When the stock peaked in April, insiders dumped the stock. That would be a good sell level going forward.
1/6/11 This looks like it's going to drop back to 13 then 12 then 11.
2/16/11 I placed a stop below the minor low, at 17.55."
On the chart, the dashed lines are overhead resistance areas. The thicker one at the top is my optimum target. Since price had closed above that area, I was happy to take profits
if I got stopped out.
The stock hit my stop on February 23 on market weakness. I made 194% on the trade or almost a triple.
-- Thomas Bulkowski
See Also
- Coldwater Creek (CWTR), congestion breakout on entry, hit stop on exit, 83% in 7 weeks.
- CNO 2.0. Fibonacci retrace on entry, inverted dead-cat bounce on exit. I made 90% in 2 months.
- Encore Wire (WIRE), rounded bottom on entry, inverted dead-cat bounce on exit, +24% in 2 months.
- Frontier Oil (FTO) trade. Made 64% in 3 months.
- Hudson Highland Group (HHGP), head-and-shoulders on entry, hit stop on exit, +55% in 3 months.
- National Fuel Gas (NFG), ascending triangle on entry, hit target on exit, +23% in 3 months.
- Vivus, full retrace of gap on entry, sell on symmetrical triangle breakout and bad news, 37% in 7 months.
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Written and copyright © 2011 by Thomas N. Bulkowski. All rights reserved. Avoid any week with a Monday in it.
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