[isatrader]

Anyway, question about stops. I'm an investor. Keir (KIE.L) is currently below the MA30 and the recent minimum of 1681 is close to the previous minimum of 1670. The book states that it is OK for the price to drop below MA30 provided it is higher than the previous minimum and the MA30 is rising. Ref page 189.

On this basis I've put a stop in at 1669 - if it hits 1669 it has violated the previous correction low and the above statement means I should sell. Do I appear to have interpreted the book correctly?

The prices you have mentioned are different to my two data sources, which are ADVFN and Prorealtime, which have the previous significant weekly low at 1662 on Nov 22nd 2013, which I've marked a horizontal trendline from on the weekly and daily charts attached.

   

The investor stop loss should have been placed below the last significant swing low and the 30 week MA, and so it would have been quite far away initially as the 30 week MA was still down in the 1400s, but as time has gone on the 30 week MA has risen past the 1662 swing low, and so you would have been able to raise your stop right up close to the swing low, and would have given it a little bit of room and so imo it would have been placed below 1650, and possibly a little bit lower due to the 200 day MA being very close to that level, and so it would have just survived this weeks open and low of 1650 by the skin of it's teeth.

KIE.L moved into Stage 3A last week imo, with the retest of the swing low and break below the 30 week MA. It broke the swing low by a small margin but it rebounded from there at the start of the week and it's 200 day MA which also offered some support, and is now slightly above it. However, there has been a significant decline in it's technical attributes as it went from a score of 8 out of 9 to a 3 out of 9 in a single week, and so is definitely showing the signs of forming a Stage 3 pattern.

The book states on page 189 that: "...even if the stock slightly penetrates the MA along the way, you can still stay with it. However, this is only true if two important criteria are met. First, the MA must still be rising. And second, the prior correction low must not be violated."

So of those two criteria, only one - the rising 30 week MA - was met in the case of KIE.L, as the swing low was violated at the beginning of this week. So imo the stock is in Stage 3A, and if your stop loss survived the piercing of the swing low, I'd now reset below the 1650 low that occurred below the 200 day MA this week and let it play out. As although it's moved into Stage 3A, that doesn't necessarily mean it will breakdown into Stage 4, and could rebound still. Which if it does rebound higher again, then the method recommends in Stage 3 that you should become more aggressive with your sell stop and raise it above the MA. See page 184-185 for reference.

I hope that helps, and I've just seen that you've done another post while I writing this. Well done on the excellent gains that you've had using the method so far.