Market Talk with Piranha was the original home of chrisperruna.com.

If you are interested, you may want to search around the old site while the new site is completely updated with images and blog entries (formatted correctly from Google’s blogger).

My name is Chris Perruna and I am 29 years old. I am an individual investor that currently resides in New Jersey with my beautiful wife and great dog but was born and raised in NY (still my favorite place). I graduated college with a degree in Architectural Engineering and went to work for a historic preservation firm in Manhattan. I started as an intern with the firm while still in college and worked on several high end projects around the corner from Wall Street. It wasn’t until I was about to graduate that I knew I wanted to work on Wall Street and trade the markets professionally (rather than personally). I currently consult for a fortune 500 big builder as an architect (listed on the NYSE), run an independent equity research firm MarketStockWatch.com and trade my own accounts for capital appreciation.

I am a trend trader looking for gains of 25% or more and losses no larger than 10% (preferably smaller). You must understand that this 10% loss is calculated into a position sizing spreadsheet that only risks a maximum of 1% of total capital. My foundation is rooted in CANSLIM philosophies but I developed my system with detailed position sizing calculations and money management rules from Dr. Van Tharp. I was inspired to enter this field after I started to read the books by the greatest speculators on Wall Street throughout American history. This blog is not affiliated with Wall Street brokerage firms, companies, newspapers, publications or any other financial institution. This ensures that all information and analysis will be unbiased as I answer to no one. However, all views and analysis are based on my beliefs and opinions and are not fact of what can and will happen in the market.

I have decided to start this blog to expand on my original website where I am the founder and president of equity research (MarketStockWatch.com). I have been a student of the market for 10 years with my passion in life torn between architecture and the stock market. The stock market will win in the end.

I open my first brokerage account as a sophomore in college and have not stopped trading since. I first gained an interest in trading from my father who owned restaurants and traded heavily in the 1970’s and 1980’s. I still trend trade heavily based on his 200-day moving average plays. I started tracking stocks when I was a teenager but didn’t become “obsessed” until college. I started college when the 1990’s market was starting to really boom and I benefited greatly over the first couple of years – it was all luck, pure luck.

As I explained in a recent interview, my worst horror story was trading Extreme Networks. It moved from $50 to $100 on several occasions and I thought I was invincible. I placed an enormous amount of money into the stock in my senior year (about 80% of my account at the time) around $55. The stock quickly ran towards $70 and I loved every minute of it of the so-called “easy money”. Without getting into details, I learned the biggest lesson of my life and sold just above $15 per share. To make matters worse, I had money from both my mother and sister in the account.

After the crushing blow to my portfolio, I wondered how some people made consistent profits in the market. Why were the analysts always wrong? Aren’t they the professionals that know the secrets of Wall Street?

I set out on a venture to learn how some people make consistent profits in the market without losing their shirt. While surfing the internet, I came across an advertisement about Investor’s Business Daily, the newspaper owned by William O’Neil. They were offering a free two week trial, so I decided to give it a try.

This was the turning point in my investing life. After reading the books written by William O’Neil, I started to realize that a personalized system was an intelligent way to invest in the market. A system with both fundamental and technical analysis was the answer, not tips on the early AOL chat boards. Understanding basic company fundamentals and studying chart patterns is the proper way to buying and selling stocks. This was only the first piece of my system as I later found (the hard way) that I needed a strong money management plan that employed position sizing and expectancy calculations.

From the O’Neil books, I was pointed in the direction of Jesse Livermore, Gerald Loeb, Nicholas Darvas, Victor Sperandeo, Martin Schwartz, Stan Weinstein, The Market Wizards, Van Tharp and many others. The story about Jesse Livermore has inspired my investing life more than any other Wall Street figure to date but in a way you may not expect. Livermore didn’t use basic money management to prevent his blow-ups. Simple risk calculations could have prevented his demise. He could have been the greatest ever but fell short because of one simple tactic.

Using O’Neil’s CANLSIM style of investing, I developed my own similar method of investing that tied directly into my personality and emotional state. As the bear market wore on, I started to test my new trend trading style of investing with some decent results. The profits weren’t as quick as ones from pre-bust days but respectable compared to the major indexes. I decided to devote more and more time into the study of my own philosophy with detailed money management rules. I spend many hours a week studying the technical side of stocks and use computerized fundamental screeners while compiling a huge database of my own. I joined several discussion boards looking for a way to teach and learn at the same time and used an old college nickname “Piranha” and started to post. Blogs came along and I started my original blog on the blogger platform but have now decided to switch to WordPress.

Here, I primarily talk about the market but have other interests in life such as poker on a competitive level, a men’s flag football league in the fall and a softball league in the spring. It drives my wife nuts but I like to compete in most things I do so sports, poker and the market feed that craving. I also enjoy traveling, attending professional baseball and football games and dining at great restaurants. Del Frisco’s (NYC) gets the nod here!

Overall, I see myself as a husband (one day a father), a trader, an entrepreneur, a great friend and someone that loves to talk “stock” – pun intended!

Enjoy the Blog!
“As you make your rise to the top, never forget about the important things, especially your most important ‘true love.’” – Christopher Perruna

Dedicated to my wife, the most beautiful woman in the world.

And it all started here…

I will be watching a few gaps from Friday to see how they play out this week:

Interesting Gap Ups:
ADBE – $37.00 (gap near $33.65)
FMD – $61.45 (gap near $52.35)

Interesting Gap Downs:
AHG – $19.92 (gap near $22)
CVTI – $11.99 (gap near $12.75)
DCX – $49.36 (gap near $52.50)
LNCR – $36.02 (gap near $37.50) – already filled a $2.50
PEG – $62.00 (gap near $66)

Piranha

I made a blog post on ADVS 10 days ago recapping the coverage on MSW. I showed you how the stock was on the move and how the 200-d moving average play was making the anticipated move that I researched in early April.

As I wrote on the first day of coverage, and reiterated several times since, the short term target was a move above $34. Advent Software smashed earnings yesterday with a four fold increase and then awarded investors with a 12.17% advance on huge volume (volume was up 374% larger than the 50-d m.a.). The stock is now up 24% in less than a month on the MSW Index. I advise that protection be placed to ensure that your gains will be captured. I myself have placed a retracement stop (explained in a previous post and on the position sizing calculator).

Added to the MSW Index on 4/1/06:
“ADVS – 28.42, I bought the stock myself. I don’t know if it will work out but I placed money on the idea and have rules to protect the downside. As you have been noticing, I have been making several 200-d m.a. momentum buys in recent months. A twelve month price target will be from $38-$40 (FYI: I got in lower than the Index price as I bought on Thursday).

It will be interesting to see where the stock goes from here as I am looking at a short term target of $34 and a longer term target above $38 towards $40.”

Piranha

LifeCell (LIFC) raised its outlook for 2006 and earned $4.1 million, or 12 cents per share, up 91% from $2.1 million, or 7 cents per share, during the same period a year ago. Sales also jumped 54% to $30.7 million from the same period last year. Analysts (or talking heads) expected earnings of 9 cents per share with sales of $29.5 million.

I have been covering LIFC on the MSW index since February 4, 2006 at $22.13 with a breakout point of $24. As you can read below, we have been watching the flat base setup above the 200-d moving average over the past two months. Patience paid off once again as the stock broke-out today; up over 16% on volume six times the 50-day average.

Another text book breakout during the current earnings season! The MSW Index is on fire in 2006. The general market analysis will be provided tonight since I was excited over the breakout of LIFC.

The history of my coverage on the MSW Index is located below:

4/22/06
LIFC – 23.17, A 4.75% gain this week as the stock moved up on higher volume than the previous week but stayed below average. The ideal entry and buy signal is still a strong move above $24. Rating: Hold

4/15/06
LIFC – 22.12, Now a 14 week sideways flat base with the breakout on a move above $24 and a breakdown on a move below $20 (and the 200-d m.a. Rating: Hold

4/8/06
LIFC – 21.79, I consider this a 13 week sideways flat base with the breakout on a move above $24 and a breakdown on a move below $20 (and the 200-d m.a. Rating: Hold

4/1/06
LIFC – 22.55, I said it was a trend buy last week as it produced a return of 6.27% if you bought while it walked along the 200-d m.a. Still in buy territory with the next important move above $24.05. Rating: Hold – buy

3/25/06
LIFC – 21.22, Walking along the 200-d m.a. (this is a stock that can be bought now as a trend-buy using the moving average). Rating: Can enter now at moving average (also building irregular base). Be careful with the medical stocks I have been screening lately!!!

3/18/06
LIFC – 21.45, Walking along the 200-d m.a. (this is a stock that can be bought now as a trend-buy using the moving average). Rating: Can enter now at moving average (also building irregular base).

3/11/06
LIFC – 21.30, Down 4% for the week with a 4% recovery on Friday on volume near average. Support was received above the 200-d m.a. this week with a close on Friday slightly above the 50-d m.a. Rating: Building a base

3/5/06
LIFC – 22.32, A nice 5.28% gain this week on volume that was above average but below last week’s tally. A double top breakout buy occurs with a move above $24. Rating: Building a base

2/25/06
LIFC – 21.20, Down slightly this week but still trading above the 50-d m.a. with the recent up-trend intact. Rating: Building a base

2/18/06
LIFC – 21.29, A 3.10% move higher with the pattern still V-shaped base and a suggested buy above $24 on the P&F chart. Rating: Building a base

2/11/06
LIFC – 20.65, The stock never gave a buy signal and is in a V-shaped base with a suggested buy above $24 on the P&F chart. Rating: Building a base with a target of $40 in 2006

2/4/06
LIFC – 22.13, The stock makes the MSW Index as it gained 7.95% on the largest daily volume in months. Its chart pattern can be considered a cup shape but the P&F suggest a buy above $24. Rating: Building a base with a target of $40 in 2006