Sell Alert: The Buckle (BKE)

By Jim Pearce • December 13, 2016

TRADE INSTRUCTIONS
Date: December 13, 2016
Name: The Buckle, Inc.
Symbol: BKE
Type: Close
Limit: Sell at market

TRADE RATIONALE
As I mentioned in last week’s alert, The Buckle (BKE) was trading well above its 50DMA and near its top Bollinger Band so I raised its stop level to $25.00, which it closed below yesterday so I am now closing out this position. We opened this position five weeks ago ago at an entry price of $22.65, so even though we are selling it short of our target price of $28.00 we will still achieve an annualized return in excess of 100% at today’s opening price. That makes for four consecutive winning trades, with three of them in excess of 100% on annualized basis so we are on a roll! I know some of you played this with options and did considerably better than that, and were kind enough to share your strategies with others who hopefully did the same. On to the next one!

Stock Talk

Comments Oldest First

Comments Guidelines

black arrow

12/13/16 ‐ 10:07am ET December 13, 2016 at 10:07am ET

I could see things were dropping overall yesterday, so I put on my sell hat and sold BKE yesterday.

Thanks for another profitable trade, Jim.

Larry Johnson

12/13/16 ‐ 10:30am ET December 13, 2016 at 10:30am ET

I got stopped out yesterday.

Maria R

12/13/16 ‐ 11:03am ET December 13, 2016 at 11:03am ET

Thanks. sold BKE for 24,751@ Schwab

Karen Williamson

12/13/16 ‐ 12:49pm ET December 13, 2016 at 12:49pm ET

Has anyone stopped out on DELPHI yet? I stopped out today @ 69.oo

Dramatic License

12/13/16 ‐ 12:50pm ET December 13, 2016 at 12:50pm ET

I closed it out a little over 71 I think, but it’s coming back again today.

Ado Casagrande

12/13/16 ‐ 4:21pm ET December 13, 2016 at 4:21pm ET

i got stoped out at 25.05 not bad for a beginner.. thanx for everything MERRY CHRISTMAS

Jim Pearce

12/13/16 ‐ 4:49pm ET December 13, 2016 at 4:49pm ET

And I hope you made some decent money on that trade so you can buy yourself a nice present! 🙂

Roger Hill

12/13/16 ‐ 4:41pm ET December 13, 2016 at 4:41pm ET

Sold BKE170317C22.5 for $2.88 for a 33 day return of 12.27%.
Thanks, Jim

Jim Pearce

12/13/16 ‐ 4:50pm ET December 13, 2016 at 4:50pm ET

You’re welcome. I’ll take that type of return every time; hard to beat a 135% gain on an annualized basis. Good work!

black arrow

12/14/16 ‐ 6:29am ET December 14, 2016 at 6:29am ET

May seem fundamental, but can you give us the formula for an annualized return or direct us where it is listed please?

Jim Pearce

12/14/16 ‐ 9:26am ET December 14, 2016 at 9:26am ET

[(exit price – entry price)/entry price] * (365/days held).

Dramatic License

12/14/16 ‐ 9:52am ET December 14, 2016 at 9:52am ET

Jim, this is how I have been doing it myself. However, I came across a seemingly more complex way of calculating it. Are there multiple formulas used in calculating annualized returns?

Jim Pearce

12/14/16 ‐ 9:54am ET December 14, 2016 at 9:54am ET

There are, depending on how you want to treat the compounding of returns, if at all (which my formula does not; its simply a straight line extrapolation).

Dramatic License

12/14/16 ‐ 9:56am ET December 14, 2016 at 9:56am ET

Thanks, Jim. I do think the other formula I came across had compounding figured in also. I’m fine with the straightforward method and it’s what I’ve been using.

Jim Pearce

12/14/16 ‐ 10:03am ET December 14, 2016 at 10:03am ET

Compounding has the effect of exaggerating the return, which is why I don’t use it. For example, if you earned a 10% return over 36 days that would equate to a 100% annualized return. However, if we compounded that return for ten separate 36-day holding periods the annualized gain is closer to 150%. But since we advocate putting a fixed dollar amount into each position, I feel the straight-line approach is more accurate.

Dramatic License

12/14/16 ‐ 10:04am ET December 14, 2016 at 10:04am ET

Ah, thanks for clarifying that. That’s helpful.

Dramatic License

06/02/17 ‐ 8:55pm ET June 2, 2017 at 8:55pm ET

Looking back through some past trades and current prices, there’s a reason we have stop losses. BKE and KORS down a lot from where we exited. Glad to see a loss sometimes prevents a huge loss. 🙂

Dramatic License

06/02/17 ‐ 8:57pm ET June 2, 2017 at 8:57pm ET

…or in this case a small gain prevented a big loss!

Add New Comments

You must be logged in to post to Stock Talk OR create an account