Surprise, Surprise

• January 3, 2002
• Duke Heberlein

Good traders have these two qualities: They are disciplined enough to wait
for follow through before entering a position, and are flexible enough to go the
other way when a setup does not work out.

 

 

Fair Isaac and Co.
(
FIC |
Quote |
Chart |
News |
PowerRating) at first glance looks like a
good candidate to rally out of a pullback. It is in an uptrend, has an positive
trending ADX of 32 and has left a bullish tail after reversing Tuesday’s weak
close. However, this morning, we get a little surprise when Robertson Stephens
raises some questions about the company’s fourth quarter 10K.

 

13:21:46

Fair Isaac and Co. (FIC)
is imploding on an expansion of range and more than 700% of its average daily
volume. Concerns raised by Robertson Stephens this morning regarding FIC’s
fourth quarter 10K appears to be the catalyst for the bloodletting. FIC is down
12.80 to 49.15  and has a

3-month relative strength ranking of 60 from TradingMarkets.com.

 

 

When patterns fail, they many times are making a fast and
furious move. The disciplined trader is now tracking FIC for additional movement
to the downside, and kept himself away from a big hurt by not trying to front
run the setup. Resist temptation to do this when it hits, you will miss one of
these, and be glad you did.

Until tomorrow,

Duke