Page 791 - How to Make Money in Stocks Trilogy

Breaking Boards: Successful Trades and Lessons Learned 75

That same day, the stock was added to Leaderboard, with a chart annota-
tion showing a cup-with-handle base and a potential buy point of $73.08.
On January 5, Continental Resources broke out of its base pattern on vol-
ume that was 78% above average. Tom bought the stock and sold it 7 weeks
later with a 25% gain.
Some of Tom’s other successful trades in 2012 were
Select Comfort. 25% gain in 7 weeks

Herbalife. 25% gain in 11 weeks
Priceline. 25% gain in 5 weeks

• KEY POINTS •

• Don’t get confused by reading too many different investing
publications.
• Use IBD and MarketSmith to find winning stocks.

Celebrating Gains, Reviewing Mistakes
Townsend Baldwin began reading IBD in 2004 and was successful using the
CAN SLIM Investing System to trade in and out of Nutrisystem, the maker
of prepackaged diet products.
He first purchased Nutrisystem in July 2005 when he saw the stock hitting
new price highs and sold when the stock made a 20% gain. Later that same
year, after the stock came out of a cup-shaped base, Townsend bought
Nutrisystem again, netting a 25% gain. He had enough capital invested in the
stock to buy an apartment in New York City with the profits, so these two
trades were very exciting and rewarding. But as Townsend looks back on the
trades, he says he realizes that he missed out on even bigger gains. From his
first purchase in July until the end of the year in 2005, Nutrisystem produced
a 214% gain. Townsend had not yet learned how to handle a big winner.
From October 2004 through December 2005, Nutrisystem made a
2,100% move.
The company came public in 2000, but what was new about the company
in 2004 and 2005, the “N” in CAN SLIM, was that Nutrisystem had new
management and had found a new way to sell more of their products through
heavy marketing, such as selling on the cable-shopping network QVC.