Concur Technologies Inc (CNQR)

Company. Concur provides web-based corporate expense management software and services that are designed to improve business operational efficiency and reduce cost.

CNQR chart
gain Bottom line
40% this sale
+16% overall

Buy. CNQR had been trading sidewise for about a month and had just broken out of a triangle formation with a big jump on high volume. At the same time, the +DI line made a big jump up (indicating increased "buying pressure") and the ADX line reversed and started back up (indicating a strengthening trend). The Chaikin oscillator also made a sharp turn upwards. My statistical tea leaves said, "Buy!"

Sell. There's only one thing to say about this sale: Damn! Damn! Damn!

Less than a week after I bought, CNQR stock took two giant steps back down and dropped back to my loss-limit of 8%. I tried to have it both ways: follow my rules and hedge my bets. I sold half my shares at a small loss. That's the first "damn."

As I've now seen happen several times, the day after my first sale, CNQR continued its upward move. I have to work on a corollary for my rules that covers the few days immediately after a purchase. As I've noted elsewhere, it's not uncommon for a stock to advance, then pull back temporarily, and it comes down to a question about how much confidence I have in my original judgment.

In mid-June, the price fell back two days in a row, recovered, and then made giant steps upward, settling around $10. I expected it to "consolidate" for a while at that level or a little below since the price had jumped more than 25% in just a few days.

I took courage when CNQR held steady at $10, even when the rest of the Nasdaq market was suffering vertigo. But, I saw that the Chaikin oscillator was falling pretty steeply. It is supposed to be a fairly good leading indicator, and if the price of CNQR was really going to fall, I wanted to protect my very handsome gains.

I placed a stop-loss order to sell if the price dropped below $9.78. According to my strategy, this is the "pay attention" point 5% below the highest close.

Now here's the kicker. A recent article on advised:

Use Stop - market orders not Stop - limit orders. A Stop - market order causes your order to be executed at the market once the stop price has been violated. A Stop - limit order is activated once the price violates the stop price but can only be executed at the limit price. If a stop is activated, the market is telling you that you are wrong. When you're wrong, you want to get out now. more tips from Market Edge

This advice made sense to me; I had recently gotten stuck with three stocks in my portfolio because the stop-limit orders I placed wouldn't execute. So my CNQR order was a stop-market order, the first time I've used this type of stop-loss order.

Normally, there isn't much difference between the relevant prices: last price, current asking price (from seller), and current bid price (from buyer). Normally. But there are always opportunists lurking out there. For example, almost every stock I track usually has an bid sitting in the queue to buy the stock at $0.01, just in case someone says "Sell" rather than "Sell, but not for less than $x.xx" That's an extreme case, of course. But there are always people bidding 50¢ or $1 less than the going rate, just in case.

So it happened today with CNQR.

CNQR intraday chart

The stock was trading in a very narrow range, when suddenly a big gap opened up between the bid prices and asking prices, big enough to activate* my stop-market order. And since it was a market order (not a limit order), two buyers got a very good deal on my CNQR shares. That's the second and third "damn."

*On the Nasdaq, a stop order is activated by the highest available bid price, rather than the price of the last completed transaction or the asking price.