The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Mar. 26, 1997)
Yesterday's boost for technology and energy-related stocks showed no signs of slowing today. With the Dow up only a handful of points, the Nasdaq was up the rough equivalent of 100 Dow points. Given the disparity between the year-to-date returns for the Blue Chips and smaller stocks, the gap in performance this week isn't surprising.

Today even saw the big-name tech stocks powering ahead, with the likes of INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> and MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> tacking on 5% and 4%, respectively. Joining the bellwethers were stocks like ATMEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ATML)") else Response.Write("(Nasdaq: ATML)") end if %>, COMPAQ <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %>, DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>, QUANTUM CORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QNTM)") else Response.Write("(Nasdaq: QNTM)") end if %>, SCI SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SCIS)") else Response.Write("(Nasdaq: SCIS)") end if %>, and even SUN MICROSYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %>.
Among the oilfield service stocks, ENSCO INT'L <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ESV)") else Response.Write("(NYSE: ESV)") end if %> joined the major oil group in a group gusher.

How are our three stop-loss test cases doing these days? It's been over a month on all three stop points we experimented with now, so let's see where the stocks are. 3COM <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> peaked at $80.125 and was stopped out in our hypothetical model at $60.00 (25% below the stock's highest closing price). Today it still trades at $35.50, some 56% below its high and 41% below the stop point. A stop definitely saved investors money on this one.

AMERICAN POWER CONVERSION <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APCC)") else Response.Write("(Nasdaq: APCC)") end if %> peaked at $31.375 and was stopped out at $23.50. After that it bounced around for a while and closed up today at $23.50, right at our stop-loss point several weeks ago. This one didn't save anything, but it didn't cost anything either. Call it a toss-up.

And finally, APPLIED MAGNETICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: APM)") else Response.Write("(NYSE: APM)") end if %> peaked at $59.00, was stopped out at $44.25 and now trades at $29.75, even after a big gain today. It's still 50% off its high and 33% below the sell stop. Another pretty fair success.

This is by no means a statistically significant study, but it is instructive to watch these stocks in real time to see how a potential sell stop might help protect your gains with somewhat volatile growth stocks. A group of Foolish readers are now analyzing a slew of historical information to carry my superficial stop experiments to a much more thorough level. As they finish up segments of their research, I'll pass along their findings right here. I don't expect to find a perfect system, of course, but anything that works most of the time and improves one's overall returns is good in my book. Stay Foolish.

Monthly Growth Screens
     (Jan. 3 to present)
  11.57%  Relative Strength  
   6.72%  YPEG Potential  
   5.67%  S&P 500 Index  
   3.61%  Low Price/Sales  
  -3.46%  Investing for Growth  
 -12.81%  EPS Plus RS  
 -19.11%  Formula 90  
 -20.56%  Unemotional Growth  

Annual Value Screens
     (Jan. 1 to present)
 10.54%  Dogs of the Dow  
   6.71%  Dow Jones Ind Avg  
   5.97%  Beating the S&P  
   2.21%  Dow Combo  
   1.60%  Unemotional Value  
   1.60%  Beating the Dow  
  -1.43%  Foolish Four