[Tom]

GTY attempting to complete a breakout from a one and half year base. Will need to see a volume surge to make it more interesting.

[Update] It closed the week at 20.15, which is above the 19.94 range high from July 2012, and so is a confirmed Stage 2 imo.

Hi, I am practicing Stan's investor sell-stop method on GTY and would like to get your opinions:

If I purchased GTY on Mar 4th at $20.15 on stage 2 breakout. Here is what I would do:

1. Sell Stop: the previous correction low is on Feb 15th at 18.4 so the sell stop should be set around 17 7/8.
2. On May 6th, GTY reaches previous high so the sell-stop should be set below the 30 week MA(18.49) on Apr 3rd. and that is no difference than the initial sell stop.
3 . A significant trend line is formed at point Dec 31, Feb 15, Apr 3 and set sell-stop at 21 for half of the positions . It is subsequently touched on May 29th.

Am I doing alright so far?

My beginner question is: How do I handle the other half of the position?

thanks.

Hi Tom, due to the time period you need to look back using unadjusted data on your chart, for which you need to put and underscore before the ticker _GTY

As charts get adjusted for dividends, splits, new shares etc over time which can affect the prices you were mentioning.

What I'd say about this one now almost one year later is, that if it appeared now that I'd probably no longer highlight it, as it's missing the key ingredient that all Stage 2 breakouts need. Which is at least 2x times the average volume on the breakout week, which it didn't have, although it had a slight increase on the following week, but was still only just above average.

I've marked up the chart, so you can see how I think it should have be played following the methods rules. The trendline was well established with five touch points, so you would have exited 50% on the first close below it that you highlighted. Especially as there was no volume increase on the continuation move higher, which was the first warning sign.

The stop loss positioning I've marked up on the chart, and you would have been able to raise the initial stop on the continuation by around a point just under 19 as the 30 week MA had moved up enough for it to get closer to the swing low following the Stage 2A breakout.

Finally, it made a weak lower high to form a head and shoulders pattern, and closed below the 30 week MA, so you would have exited the position at around the same level that you entered. So it would have only got a small profit from the 50% initial exit, and breakeven from the second exit, or small loss if you'd waited for the Stage 4A breakdown two weeks following the exit I highlighted.

I hope that helps.

Thank you!

I have some follow up questions:

1. It was mentioned that adjusted data should be favored in your interview to Stan. Why use unadjusted data here?

2. You mention "Especially as there was no volume increase on the continuation move higher, which was the first warning sign." In the same interview, Stan replied with "Volume is less important on a continuation move in Stage 2 than it is on the original breakout but there should be at least some marginal increase in volume." I have to say "marginal increase in volume" sound a bit vague.

3. I am new to stockcharts.com and trying to get the same chart as you do. Especially I would like to get the a) solid line on close. b) How to get the relative volume and relative performance chart. How do I do that?

Thanks again.