Tuesday, April 26, 2011

Cummins Inc. (CMI)

How has Cummins' stock traded since I first blogged about it back on March 26th when it was selling for a little over $104? Well, they reported great first quarter earnings before the bell this morning and the stock is trading above $116 right now, so I'd say it has continued to trade pretty well... 



1. LONG the week of 5.19.03 at $7.05. My stop was $5.60, so the initial risk (R) on the trade was $1.45. Stopped out and reversed to short at $16.39 the week of 3.28.05. The percentage gain on the trade was 132.5%, and the reward-to-risk ratio was $9.34/$1.45 = 6.45.

2. SHORT the week of 3.28.05 at $16.39. Using $19.08 for a stop, R = $2.69. Stopped out and reversed to long the week of 7.11.05 at $18.20. The percentage loss on the trade was -11.0%, and the reward-to-risk ratio was -$1.81/$2.69 = -0.67.

3. LONG the week of 7.11.05 at $18.20. With the stop set at $15.57 the R was $2.63. Stopped out and reversed to short at $18.25 the week of 10.17.05. The percentage gain on the trade was 0.3%, and the reward-to-risk ratio was $0.05/$2.63 = 0.02.

4. SHORT the week of 10.17.05 at $18.25. The stop was $21.25, so my risk was $3.00. Stopped out and reversed to long at $21.09 the week of 11.28.05. The percentage loss on the trade was -15.6%, and the reward-to-risk ratio was -$2.84/$3.00 = -0.95.

5. LONG the week of 11.28.05 at $21.09. With $18.44 for my stop the R on the trade was $2.65. Stopped out and reversed to short the week of 1.3.07 at $27.50. The percentage gain on the trade was 30.4%, and the reward-to-risk ratio was $6.41/$2.65 = 2.42.

6. SHORT the week of 1.3.07 at $27.50.  The stop was $31.35, so that means R was $3.85. Stopped out and reversed to long the week of 1.29.07 at $33.01. The percentage loss on the trade was -20.0%, and the reward-to-risk ratio was -$5.51/$3.85 = -1.43.

7. LONG the week of 1.29.07 at $33.01. My stop was $28.06, so my R was $4.95. Stopped out and reversed to short at $44.32 the week of 9.22.08. The percentage gain on the trade was 34.3%, and the reward-to-risk ratio was $11.31/$4.95 = 2.28.

8. SHORT the week of 9.22.08 at $44.32. The initial stop was $71.90, so R = $27.58. Stopped out and reversed to long the week of 4.20.09 at $32.66. The percentage gain on the trade was 26.3%, and the reward-to-risk ratio was $11.66/$27.58 = 0.42. 

9. LONG the week of 4.20.09 at $32.66. With the stop set at $18.82 the R was $13.84. Closed last week at $108.94 with a $92.27 stop. The percentage gain on this trade is 233.6%, and the reward-to-risk ratio is $76.28/$13.84 = 5.51.

Bottom Line:
Winning Trades: 6 | 66.7% | $19.18/share avg.
Losing Trades: 3 | 33.3% | -$3.39/share avg.
Average Trade: Gain of 45.6% | $11.65/share | Reward-to-Risk Ratio (R): 1.56

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