Trader Paul

Secure Computing (SCUR)

Company. Securing Computing develops "network security products that help our customers create a trusted environment both inside and outside of their organizations." (company website)

SCUR chart
gain Bottom line

Buy. I bought SCUR on a down day, just after the ADX line had crossed 20 going up and the Chaikin oscillator had made a steep jump from zero. There had been two days of much migher than average volume. The conventional wisdom is that price moves accompanied by high volume reflect "real" changes in perceived value of a stock. Two days later SCUR began marching onward and upward.

There was a very nervous time in mid-May when the price fell several days in a row and the +DI and -DI lines threatened to cross. Adding to the gloomy picture, the Chaikin oscillator had fallen steadily since my buy. This was all on lower than average volume, however, so I hung on. On the other hand, the 50-day moving average was about to cross over the 200-day moving average, always a very positive sign. Just in the knick of time, SCUR resumed climbing.

Sell. I didn't follow my own rule for selling, and it cost me more than 7% of my profits. When the SCUR closed at $9.16 on 10 June, that lifted my sell-point to $8.43 (highest close – 8%). Therefore, when the price plunged on 19 June, on much greater than average volume, the proper thing would have been to sell then. However, the following day (20-Jun), the stock appeared to recover and I broke my rule, and hung on. Had I sold for $8.43 on 20 June, as I could have done, I would have harvested a 52.7% profit.

I finally sold on the third consecutive down day when SCUR threatened to fall below $8.00, 43¢ below my sell-point.

As I mentioned in my article on remorse, the hope that a stock "might go back up again" is very hard to resist. SCUR is an excellent case in point.