Rose and Thorn - John Pocorobba 2-10-22.pdf

Boston IBD Meetup
Rose and Thorn
February 10, 2022
John S. Pocorobba
JPoco722@gmail.com
Twitter: Rain King@JPoco722

This presentation is for educational purposes only and is not intended to be a recommendation or
guarantee of specific security or a particular methods results
John S. Pocorobba is an amateur, individual growth investor, not affiliated with IBD or Marketsmith
CAN SLIM Methodology for 17+ years
Attended:
Marketschool
Chart School
IBD Masters Program 4x
Founder of BlueSky Investing Event
All Presenters tonight are amateur individual investors.
This presentation contains registered trademarks of Investor’s Business Daily, Inc., William O’Neil + Co.,
Inc. and their affiliates: CAN SLIM®, Investor’s Business Daily®, IBD®, SmartSelect®, SMR®, Acc/Dis Rtg®,
Stocks on the Move™, The William O’Neil + Co. 197 Industry Groups® and MarketSmith®.

Boston IBD Meetup:
• March Boston IBD Meetup: “Proper Bases|Faulty Bases”
• J.Pocorobba Molly’s World, March 5, “Context & Relativity”
• Scaling to Protect Profits
• Constructing a Winning Portfolio
• Advanced Buying Techniques
• Model Book Stock Review: TBD
• Advanced Chart Reading
• Winning Trader Characteristics
• BlueSky5 Investing Event – October TBD

Agenda
• https://bit.ly/2p1GXbv
• Post Analysis
• Volunteers: Rose and Thorn Trades

Post Analysis, Risk Management, Trade Management

“The only way you get a real education in the market is to invest cash, track
your trades and study your mistakes.” Jesse Livermore

Post Analysis
Critical Step to improving your results
Like watching paint dry…..
Analyze all your decisions
……trying to identify repetitive mistakes
1. Maintain a Trading Log
• Organize your Trades
2. Individual Trade Questions
• Where are the stocks now?
• Repetitive Mistakes,
• Lost Opportunities, New Rules
3. Portfolio Questions
4. Study Past Leaders
5. Detailed Checklist (posted)

Simmons Precision 1964 -’65
Bill did extensive post analysis
One of the foundational
elements of CAN SLIM
Research the best past winners
Sell all on way up
“Climax Top” on
3/1 split. Do Not
Sell Short
Now have another qtr out and it shows 3 qtrs
of dramatic EPS acceleration from 25% to
67% to 175%. Must hold stocks that shows 3
qtrs. of accel and up 100% to 150% or more
thru the first real correction even if it has a
week or two of big vol first time selling
V.I.P Special Hold Rule
No stock can be extended no matter
what you or even your computer thinks
if it has giant earning acceleration for 3
qtrs. and you are only out of the initial
base by 9 or 10 wks!

Every year I will conduct
post analysis of 10-20 of
the years best winners
Great exercise
Train your eyes
Identify common
characteristics

Post Analysis
Example:
Square (SQ)
Daily 2017
• (+) Bought perfectly from
Cup Base
• (+)Sold on Shakeout but
bought right back on fast
recovery
• (+)Sold Half Before
earnings report to protect
gains (+32% in 6 wks)
• (+) Recognized Upper
Channel Break sell signal
and sold another 25%
• (+) Recognized Climax Top
and controlled emotions
and sold the rest (+72%
gain)

Post Analysis: Former Leaders
• 2021-22 Many Big Growth Leaders Topped
• Study Past Winners
• Selling is more difficult than buying
• Pieces of the puzzle
• One by One Clues it is time to sell
• Study/Improve your Chart Reading Skills
• April 2021 Archives: https://bit.ly/2p1GXbv ”New Bakers Dozen Sell Rules”
• Sell Signals
• Cloudflare (NET)
• Bill.com (BILL)
• Sea Limited (SE)

Lifecycle of a Growth Stock
BASE
Positive ‘E’ Surprise
‘E’ Estimates Revised Up
EPS Momentum Loss of E Momentum
(Guide Lower)
Negative “E” Surprise
Estimates Revised
Lower
IBD Research: When big leading stocks
tops, the average decline is 72%
Bear Market Bottoms
Bull Market Tops
NET -65%
SE -67%
ROKU -71%
SHOP -55%

Sea Limited (SE)
Weekly 2019 - 2021
1. Late Stage Base (stage 4 & 5)
2. Wide/Loose Price Action
3. ‘Change’ – 5 wks below 10w MA
4. Stalling at New Highs
5. Wide range Reversal on huge Vol
6. Largest One Day Point Loss
7. 10w MA Break
1
2
3
5, 6
4
7
CAN SLIM teaches us to always
Sell only on the Technicals;
Fundamentals always look the
best at the Top
Upper Channel
Line Break

Sea Limited (SE)
Daily 2019 - 2021
Stage 4 base
1. Late Stage Base (stage 4 & 5)
2. Wide/Loose Price Action
3. Change – 5 wks below 10w MA
5. Wide range Reversal on huge
Vol
7. 10w MA Break
“Change”: stock
spends time below
50d (caution)
NH on Low Volume
Negative
Reversals
Largest 1d
point loss and
50d MA Break
on big volume
Stage 5
BO attempt
fails
Vol picks up on
down reversal

1. Wide/Loose Base
2. Stalling/Reversal Week
3. New Highs on Low Volume
4. Largest One Day Pt Loss
5. 10w MA Break
Cloudflare (NET)
Weekly 2020 - 2021
1
2
3
4, 5
3
4
Base under Distrib (caution)
- 4 red wk vs 3 blue wk on abv
ave vol
- Biggest wk in base is red

Cloudflare (NET)
Daily 2020 - 2021
Huge range down reversal;
vol picks up (distrib)
Shakeout
“Change”: Acceleration to
the upside (up 13d in row)
Largest 1d
point drop
50d break
on big vol
1. Wide/Loose Base
2. Stalling/Reversal Week
4. Largest One Day Pt Loss
5. 10w MA Break

1. Wide Loose Stage 4 Base
4. 10w MA Break
Bill.com (BILL)
Weekly 2020 - 2021
1
Base under Distrib (caution)
- 3 red wk vs 2 blue wk on abv
ave vol
- Biggest wk in base is red
- High Vol red wk in handle is
negative
2
3
4

Bill.com (BILL)
Daily 2020 – ‘21
3. 10w MA Break
Largest 1d Point Loss
NH on Low
Vol
50d break
on big vol
High Vol in
handle (-)

Post Analysis: Maintain a Trading Log
• For every trade, Print DAILY and WEEKLY Chart (in real time)
• Primary reason for the Trade
• Number of Shares
• Price per Share
• Average Cost
• Gain or Loss on the Trade
• General Condition of the Market
• Uptrend (50d above 200d)
• 50d upward slope
• Distribution days

Post Analysis: Organize your Trades
• Sort Top % Gainers and Top % Losses
• Top 5 Gainers
• Top 5 Losses
• Big winners of the Year – Why did you miss them?
• Analyze these trades in detail
• Capture what you did well (+)
• Recognize the mistakes you made (-)
• Create new Rules to help you improve
• Go back with the new rules and apply them to your bad trades…..how
much would they have improved your results?

Post Analysis: Some “Key 2021 Questions”
• Buying late stage bases…stage 3, 4, 5, 6?
• Take larger than normal positions without much cushion? Jan/Feb/Mar?
• Cut your losses quick…especially if you took big positions without much cushion?
• Chase stocks beyond proper buy points? FOMO?
• Were you over concentrated in the hot group (Enterprise Software?)
• Did you plan your trade outside market hours….calculate your stop/loss and risk, and
position sizing
• Were you in sync with the Market….Initial Growth Top in Feb and again late
November?
• Equity Curve: Take ‘nicks’? (5-10%) or a ‘body blow’ drawdowns? (15-20%+)
• Were your problems on Buy side or Selling?

Track Lessons Learned each year: EXAMPLE
• 2013
• Didn’t follow 7% stop loss rule multiple times (-)
• 2014
• Chased stocks beyond the pivot point 6 times and took losses averaging 10%(-)
• Took 20% gains perfectly (+)
• 2015
• Didn’t see the sell signals and gave back too much. Need to study all the sell signal
again (-)
• Pyramid buying was done well (+)
• 2016
• Wasn’t patient. Got scared when position was too big. Sold winners too soon
when no sell signals triggered
• 2017
• Held a big winner for 12 months (+)
• Got shaken out of leader and didn’t buyback (-)
• 2018
• Kept trying to buy stocks during a Bear correction (-)

2022 Rose and Thorn
• Thank you to all volunteers!
• Self Improvement - Commitment
• “Rose” – Best Trade
• “Thorn” – Worst Trade
• Learning Lessons for All

2022 Volunteers
• Steve Swetz
• Logan Moss
• Francisco Giordanelli
• Aniket Jepaliya
• Victor Rossin

B1 & B2 $95.06
20% Profit
Goal = $110.56
Weinstein
Phase 1
B2 $114.04
(20% gain)
Rebuy B2
$114.25
Highest Weekly Volume
since COVID low
4 Weeks is TOO
SHORT to be a base
Stage 2 Base
From 2nd stage base pivot
point, Up 90% after 21 weeks
B2 $145.35
(27% gain)
B1 $137.01
(44% gain)

B1 $95.06
B2 $114.25
B1 $137.01
(44% gain)
B2 $145.35
(27% gain)
Gap Up after
Strong EPS report
ROSE: Buy a stock with very high
EPS/sales growth gapping up on an
EPS report and selling when identified
climax characteristics.
B2 $114.04
(20% gain)
20% Profit Goal =
$110.56
Stalling Day

B1 $50.17
B2 $51.86
20% A1
$59.58
All $52.28(2.3% gain)
A1 $55.40 (7% loss)
THORN: Where do I begin? So many of my mistakes stemmed from one big mistake which was revenge trading to get back the
large drawdown I took in February. This big mistake led me to completely neglecting so many flaws in this chart.
1. 45% deep base while the major indexes were trending up
2. Stock advanced 200% from its November 5th gap breakout so how much fuel is really still left in the tank
3. Most of the trading occurred in the lower ½ of its base and below the 50 day MA
4. Very wide and loose price action
5. Only one above average blue week in the base
6. The RS line was horrendous on the weekly and daily charts

Weinstein
Phase 1
B1 $50.17
B2 $51.86
20% A1
$59.58
A1 $55.40 (7% loss)
All $52.28(2.3% gain)

Thorn – 1Q 2021
+3.85% YTD
-8.92% YTD
Took it on the chin over a six-day period!

Thorn – 1Q 2021
Bought Here
Sold Here
An example of one of the trades
that contributed to the drawdown.

Thorn – 1Q 2021
Bought Here
Sold Here
Another example…

Thorn – 1Q 2021
Bought Here
Sold Here
Thorn
Despite having a rough drawdown and series of losses, I
continued to trade normally. I did not modify my process
and continued to trade breakouts with large position
sizes.
Later in the year, I modified my position size and took
gains sooner to “put some wins on the board.” But only
after I produced a good-sized hole to dig out of.

Rose – NVDA
Bought Here
Added Here
Sold Here
Held Here

Rose - NVDA
Held Here
Rose
I tend to “oversell” during periods of market weakness.
I’m working on at least keeping a portion of stock until
the stop loss is triggered and the trade is definitively
broken.
During this pullback I noticed that the market’s volatility
was not too crazy, and leaders were generally holding
up. Volume was also average during first week through
10-week line.
Saving the “best for last” and holding through the
pullback and not overreacting is what made this trade
my “rose.”

Pilot $231.8
ROSE: +18% Swing Trade in 4 to 8
weeks
+ Bought on EPS GAP following rules
+ Pilot worked then bought the S1
position
+ Protected gains near ATH
resistance by taking profits
+ Sold with profit goal and rotated
the money to another trade
Sold+12%
-1/5
Buy $238.18
-5% stop
+48%
A $253.66
Sold+17%
-1/10
Sold+18%
-1/2
SOLD+26%
-1/5
- Could had made less transactions
- Position size was not standard

+ Stops worked
+ Staggered stops for B4 and B5
+ B5 stop worked
- B1 position size was insignificant
- B2 no record why I enter here,
maybe intraday?
- B3 Monday chasing to complete a
decent position size
- Irregular position sizes driving my
chasing and overtrading with too
many buys
- Improvised scaling of the positions
without planning
- Chased buys in a very volatile stock
- Greed over potential Rare Jewel
Designation
- Did too many trades with incorrect
position size for a meager +8% over
8 weeks

+IPO Swing Trade +15% in 3 weeks
+Followed my rules to not let a
winner become a loser
+Held only 1/8 into earnings
+Backstopped +10%
+5% Sold 1/4
Move Stop to break
even
B1.1 $21.78
PUT+99%
+12% Sold 1/5
- Could had bought all on IPO
Breakout day but had funds held in
other trades
- Instead of Swing Trading I could
had use the Lifecycle Trade Ascender
Rule, and held until the next base
with a larger profit
B1.2 $23.26
+22% Sold 1/3
+26% Sold 1/8
Prior to EPS
+10% SOLD
w/Backstop
OUT
~1/8 rest
Swing #1

+IPO Swing Trade +24% in 3 weeks
+Scaled at right profit goals
+Used Pilot position to start tracking
+Entered after the shakeout
+10% Sold 1/6
B $29.63
PUT+99%
- Missed entry on 4/8/2021
- Could had used a larger position
size
Pilot $30.60
Swing #2
Missed this entry
+20% Sold 1/3 +30% Sold ½ OUT

IPO Buy 1
PUT+99%
Lifecycle Trade
Stair Stepper
Rare Jewel
+100% in 90 days
>50% Sales Growth
How I could had traded it…
+30% Ascender
Sell ½
close -3% <21EMA
Respects the 21EMA
Buy 2
Add
EPS Buy 3
-10% Stops 3 & 4
Buy 4
+58% Ascender
Sell ¼
close -3% <50-day
Buy 5
+20% Ascender
Sell ½
close -3% <21EMA
+83% Ascender
Sell ¼
close -3% <50-day
EPS Buy 6
-10% stop
Stop not triggered
Hold for big dividend
Holding with +40% URG:
IPO Buy 1 (¼) +200% URG
Buy 6 (Full) +41% URG
+ Dividends
Breakout
failure

Thorn of 2021 – Palantir (PLTR)

NET
Rose:
(+) Trade from ‘20 into
’21 with 56.6% profit
(+) Fall of ’21 with 49.9%
profit
(+) Shaken out on
9/28/21 on a break of
the 50d in 98% above avg
volume
Thorn:
(-) Didn’t recognize the
U-turn in an even higher
volume; didn’t get back;
the stock more than
doubled in 7 weeks

SNAP – revenge trading
(+) Indexes are up
(+) Liquid stock, not FB
(-) After a drawback in February,
I was hell bent on getting back
to the highs. Stick with the
winner!
(-) Losses piling up even though
7-8% SL rule is in place
(-) Negative impact on portfolio
and mental capital
2021 Lessons Learnt:
1. Drawback in 2/21
impacted my results.
Waiting for “true sell
signal” delayed selling.
When sold was 18% off
the top. Got chopped up
additional 19% to -5% vs
2020 in Spring
2. New rule to prevent
drawback to total value of
my portfolio. Offensive
selling of 50% of pos’n on
a 7% off the top and rest
on additional 3%. Total
limit 10%
3. 2022 Focus:
• Offensive selling
• Portfolio management
• Develop sit-out power

2022 Rose and Thorn
• Questions?
• Download Slides and Post Analysis
File https://bit.ly/2p1GXbv
• John’s General Market Update
• YouTube Channel (search John Pocorobba)
• Twitter, Follow John: Rain King@JPoco722

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