New Buy:(THOR), Add-on Buy:(UTHR)

My goal when I started this blog was to always post a new buy or sell the day it occurred. I've done so until now, but was very busy this week and unfortunately fell behind. It's a shame, because once the moment has passed the perspective changes and it's impossible to recapture my state of mind at the time of the buy. (THOR) was on my radar for some time from my screens but from a CAN SLIM sense I didn't know what to do with it. It had broken out on a break-away gap on earnings news, a powerful move on 10 times it's normal volume traded. For some reason, it's hard to buy a stock in this situation, I guess human nature kicks in and it feels like once the stock has made a huge jump, it's too late to get on board. Of course there is no logic in this.

Then I was fortunate enough to come across a blog by a gentleman who calls himself the 'Solitary Trader.' This investor follows the CAN SLIM method, and by his account puts a massive amount of ours into his study of it. He has distilled the method into what works best for him, as I believe we should all be driven to do.

In short, he evaluated the best stocks of the last five or so years and found that one common thread was break-away gap ups to new highs on earnings. This is a mouthful, but as soon as I read what he had to say it rang true. It takes the CAN SLIM method to it's purest play - a stock that has just delivered news good enough to cause it to explode past all resistance to a new price high on huge volume. In the past year I've seen it occur enough to immediately see some sense in this method. I don't want to try to relate the person's ideas in my words - I highly suggest you visit his blog and read it from the beginning - good stuff.


When I read this blog a light went on and I decided to buy (THOR). The recent quarterly earnings increased 122%, the 3rd straight quarter of acceleration. The relative strength line is leading and the group is on an uptrend. The stock broke out on volume about 10 times average daily volume. Estimates for the next couple of years look good - 48% and 33% respectively. I entered a position at $23.42 and finished the day up several percent - just the way I like it.


As for (UTHR), I went out of my comfort zone and added on at $115.02. I regretted it almost immediately. This position closed down, and I felt then like I had too much money in the market. I think this buy showed a lack of patience. This market is just not solid enough to have much capital in - right now I'm about 50% invested. I have a tight stop around 4%.


-Geoff