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As a contributor to the New Low Observer (http://www.newlowobserver.com/about-this-site), we intend to give new insights on a low risk approach to trading in dividend paying stocks for tax deferred accounts. The New Low Observer (http://www.newlowobserver.com/about-this-site) is not intended for... More
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  • Buckle (BKE) Altimeter 0 comments
    Jun 16, 2012 8:32 PM | about stocks: BKE

    The following is a review of Buckle (NYSE:BKE) using Edson Gould's Altimeter.

    image

    Below is the performance of the buy and sell indications of Edson Gould's Altimeter based on periods when the indicator first cross below 150 for buy indication, and above 247 for sell indications.

    Date Price Altimeter buy/sell % change $1 invested
    6/12/1997 6.57 148 buy 69% $1.69
    1/28/1998 11.13 250 sell -47%  
    10/8/1998 5.95 134 buy 85% $3.13
    11/6/1998 11.01 248 sell -41%  
    11/4/1999 6.51 146 buy 69% $5.30
    3/19/2002 11.01 248 sell 120%  
    11/19/2007 24.26 146 buy 72% $9.13
    9/18/2008 41.78 251 sell -43%  
    10/23/2008 23.94 144 buy 107% $18.90
    3/9/2012 49.56 248 sell -39%  
    ????????? 30 150 buy ?????????  

    The consistency of the indicator is amazing. Only the sell indication of March 19, 2002 resulted in an outcome that was contrary to the desired result. Even so, A person who only bought BKE based on the buy signal and sold based on the sell indication would have resulted in a gain of 1,890% from June 12, 1997 to the present. This is compared to the buy and hold total return with reinvestment of dividends (including special dividends) of 766.21%. Based on capital appreciation alone, the price of BKE rose 498% since June 12, 1997.

    • +1,890% (buy/sell Altimeter)
    • +766% (dividends reinvested)
    • +498% (based on price change only)

    In the table above, the section that is italicized is the tentative estimate of when the next buy signal will be registered and the amount of decline necessary to get to the signal. It appears that based on the sell indication from March 9, 2012 to the price of $30, BKE would have to decline -39% using the Altimeter. Such a decline is well within the prior successful sell indications that resulted in losses.

    We are very interested in this stock at the right price. We believe that BKE will be a buy at $30 and below. However, prior price movement based on Gould's speed resistance lines indicated that the conservative downside target is $24.47 and the extreme downside target of $16.68.

    Historically, based on prior Altimeters, a buy indication does not mean that the price decline has actually ended. Therefore, if the buy indication is triggered then be prepared by making your purchase of the stock in, at least, two stages. Once at the trigger price and again at any desirable price lower than the trigger level.

    Note: This is a response to the article titled "The Buckle Is On Sale"

    Stocks: BKE
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