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Using The 10-20-30 Moving Averages Rule For
Trading Cisco
Part 3 - Year 2009 Cisco Moving Averages
Strategy
Introduction:
Trading article by
J. Fergus
As explained in
Part
One and then used in
Part
Two, it is better for my use of the
10 - 20 - 30 moving averages strategy to
consider closing when there is a profit
and it looks to me that the 10 day
simple moving average is turning down,
or the stock itself is turning down.
From my trades since 2006, it is obvious
to me that this strategy works well.
Over the years I have used HLC
chartings which is High, Low and Close
for the day as well as Candlesticks to
assist in making my decision when to
open and close my trades. In order to
assist my 10 - 20 - 30 moving averages
strategies I added the HLC chart to the
strategy. I am hoping it will assist,
particularly on the selling of my stock
to assist in either staying in the trade
as the stock moves up or to time getting
out of the stock.
One last thing the moving averages strategy has
provided is protection from getting caught in a
collapsing stock. By watching the moving averages I
can get out of the stock early enough to either get
a profit or have a small loss. Meanwhile though it
forces me out of the stock throughout downturns. It
certainly saved me from loss of capital in 2008.
Date
Comments & Action (all figures include
commission charges)
Debit/Credit
Balance
Mar 25 2009
Bought 1000 shares at $16.65
In mid-December (which you can see above)
the 10 day SMA crossed the 20 and 30 day EMA
but it turned back down within a session and
then never actually gave me a clear
indication to buy the stock until now. The
10 day simple moving average has moved
significantly higher. The HLC chart which I
have shown in the insert indicated that the
stock is moving higher. If you look at the
3rd arrow in the insert, you can see how the
close for the day was lower. Each of the
three days the closings were lower, but the
10 day kept moving higher. On the fourth
day, which I marked with the fourth arrow,
the stock closed on the high of the day. The
next day I tried to get a fill at too low a
price. Today I jumped in and bought my
shares.
(16654.95)
June 15 2009
Sold 1000 shares at $19.55
Just a few sessions earlier it looked like
the 10 day SMA almost crossed the 20 and 30
day EMA. On the same day the stock closed at
the high of the day which signaled there
wouldn't be a down turn yet.
The last few sessions the stock rose and
then started pulling back again. The HLC
chart indicated that each day the stock was
closing closer to the low which indicates
that the stock is probably going to keep
moving lower. The 10 day was rising, but
today the stock kept moving lower and I
think the 10 day is turning down. I decided
to sell and lock in my profit.
19545.05
2890.10
Jul 22 2009
Bought 1000 shares at 21.70
The 10 day crossed the 20 and 30 day EMA
just today but the stock has moved up
dramatically since I sold on June 15. The 10
day was already turning up over the past few
sessions. With the move higher for the 10
day and the stock I felt it was important to
jump back into the stock.
(21704.95)
Oct 27 2009
Sold 1000 shares at $23.65
I sold my shares at the open today. I have
enclosed an insert for the past few days. I
put arrows for the various days to show that
the stock kept closing near the lows for the
day. A few weeks earlier the 10 day started
to turn down but the stock only closed on
the low of the day twice. It then closed on
the high of the day indicating that the
stock will move higher. The past few days
though the stock is not indicating any
higher prices and the 10 day is turning
down. I decided to sell at this point.
23635.05
1930.10
TOTAL INCOME TO
Oct 27 2009 - $4820.20
Largest Amount Invested - $21704.95
Return on capital - 22.2%
Summary To Oct 27 2009
The stock spent a lot of time after the summer
just wandering. The HLC Charting tools assisted me
as well.
