SHREVEPORT, La., Feb. 4, 2005 (PRIMEZONE) -- StockPickReport.Com (IARD #119079, http://www.stockpickreport.com -- the web's only non-mainstream stock rating service), rates Applied Materials, Sanmina-SCI Corporation, Advanced Micro Devices Inc., Amazon.com. STOCKPICKREPORT RATINGS:
Applied Materials (Nasdaq:AMAT) -- BUY
http://www.stockpickreport.com/abrating.php?sym=AMAT
Sanmina-SCI Corporation (Nasdaq:SANM) -- WEAK SELL
http://www.stockpickreport.com/abrating.php?sym=SANM
Advanced Micro Devices Inc. (NYSE:AMD) -- BUY
http://www.stockpickreport.com/abrating.php?sym=AMD
Amazon.com (Nasdaq:AMZN) -- SELL
http://www.stockpickreport.com/abrating.php?sym=AMZN
Friday, February 4, 2005
StockPickReport Commentary
Stop/Losses, and How To Set Them
If you need a way to find a stop/loss on a stock, I've got an easy way. (By easy, I mean, "easy to do, but you'll need to practice a few times!) You'll need a stock chart, a piece of paper, a pen, and a calculator. Yeah, that sounds "old school", but this works great.
Before we get into the specifics, though, I want to point out a BAD way to find a stop/loss. The worst way I can think of is to use a "percent" model. You know, where you buy a stock and then say, "I will take an "X"% loss on any stock, but that's all."
This is bad for two reasons:
1. Sometimes "X"% is BELOW where you should have gotten out.
2. Sometimes "X"% is TOO SOON to sell.
So, Rule #1 about stop/losses is, "Don't set arbitrary stop/losses."
Rule #2 is, "Do some homework on any trade you enter. If you can't see a logical stop/loss, don't enter the trade."
Rule #3 is, "If you set a stop/loss, USE it if you have to."
Rule #4 is, "Spend about 15 minutes a day adjusting your stop/losses." (Hey, if you can't spend 15 minutes a day adjusting your stop/losses, you need to find something else to do with your money.)
1. If you are going to use a "%" model stop/loss for a stock,
and your usual percent that you'd set for your stop/loss
is, say, 10%, you can EASILY be stopped out. A stock
could EASILY fall to the bottom of a trade channel.
An "arbitrary" percent doesn't work.
2. Now, here is a CRUCIAL point: If the technical
indicators you follow point to a DOWNWARD move, there
is probably NO REASON to enter into a trade under any
circumstances. If a stock is at the top of a range, and
your indicators point to a downward move ahead,
STOP/LOSSES DON'T MATTER. You should NOT be in the
trade.
But, if the technical indicators you follow point to a move up, you still need more guidance on the stop/loss. A $5 drop would not make sense (at least not to me) if you could avoid it.
If you have questions or comments, please email don@stockpickreport.com.
For More Commentary Go Here: http://www.stockpickreport.com
All commentary written by Don Harrold, Senior Analyst.
WHAT THESE RATINGS MEAN:
StockPickReport.Com ranks stocks with technical analysis. These ratings do not indicate a "long term" view. These ratings reflect an opinion for the short term. These ratings may change based on market conditions.
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If the links to our ratings above do not work, please use these:
Applied Materials (Nasdaq:AMAT) -- BUY
http://www.bigtimenews.com/russell1000/AMAT-Stock-Quotes-News-and-Research.php
Sanmina-SCI Corporation (Nasdaq:SANM) -- WEAK SELL
http://www.bigtimenews.com/russell1000/SANM-Stock-Quotes-News-and-Research.php
Advanced Micro Devices Inc. (NYSE:AMD) -- BUY
http://www.bigtimenews.com/russell1000/AMD-Stock-Quotes-News-and-Research.php
Amazon.com (Nasdaq:AMZN) -- SELL
http://www.bigtimenews.com/russell1000/AMZN-Stock-Quotes-News-and-Research.php