Thursday, February 22, 2007

Buying ANGN at the wrong time.

How I first came across Angeion Corp. (ANGN) last week I don't remember. I don't have an IBD subscription yet, so I don't know if it's ranked very well in it's group. The little I know of it's fundamentals are that they've had good growth. So basically if ANGN follows CAN SLIM I don't know. What really interested me was the chart. I think all I was looking for was a stock above $15 that had decent growth. There are tons of those, but I liked the pull back on Jan. 25th from a high of $18.50 to an average of $16.00 for 2 weeks. I thought that is the beginning of a flat base. On Feb. 15th (Thursday) it headed to it's 50 day MA, at which point I decided that if it bounced off the following day on above average volume that I would buy it (remember this is all imaginary money). Well it bounced all right (Friaday Feb. 16th), but on only 50% of the average volume. Then I noticed that Monday was presidents day (market will be closed) and that the whole market volume was down to about 1/4 average volume, which made ANGN about double the my head. So, Tuesday I bought 100 shares at $16.40, because it didn't go above that until an hour and 45 minutes into trading, which surely would be enough time for a broker to finish a market order from the night before.

My mistakes:
1. Basically ignored everything about CAN SLIM. I don't know any of the fundamentals. I need to treat this like it were real money from now on instead of like a silly experiment.

2. A drop from $18.50 to $14.01 on Jan 30th is more than the 15% of a flat base. A drop of 24% might not be enough to be forming a cup, I'm not really sure. If it turns out to be a flat base it still needs at least 3 more weeks of being flat and I jumped the gun...a lot. If it turns out to be a cup, it has even longer and boy am I a fool.

3. I completely ignored what I know about volume rules.

4. The buy point is $.10 above the $18.50 high. The stock needs to make a new high and show that it's going to keep on going. I jumped in too early, and it could be weeks before it crosses that pivot point.

As of right now it's sitting around 16.80 making for more than 2% gain after commissions. The stock may very well just hang out, even dropping below my purchase price, for weeks. Unless it drops to a loss of 7% ($15.25) or I find something much more promising, I'll just keep my position and see what happens.

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