Multiple Entry Points With Perkin Elmer

  • June 20, 2001
  • Eddie Kwong

When a stock breaks down
below an important moving average, such as the 50-day, it is normal for a stock
to continue the downward movement. Yesterday (6/19/01), Perkin Elmer Inc. (PKI)
broke down below its 50-day moving average on nearly five times its normal daily
volume. (See chart below.) It suggested that we would see a continuation of this
down move on June 20. 

My plan for today (6/20/01) was to sell PKI at three different levels:

     1. Sell as soon as the stock moves below yesterday’s
low.

     2. Sell below the intraday low established in the first
half-hour of trading.

     3. Sell below the 50% retracement level of the April 4
low to the June 5 high.

Let’s see how it went. The green line indicates the intraday low established in
the first half-hour of trading, the red line indicates yesterday’s low, and the
black line indicates the 50% retracement level. As you can see, all transactions
were successful. (It happens sometimes.)

      

It makes your trading more fun if you have multiple entry points. 

Eddie