All-Time High Stocks: SXC Health Solutions (SXC.TO) hits a new all-time high on the TSX

SXC Health Solutions has been highlighted on the blog numerous times during the past 8 months as it continued to reach new all-time highs. The first time I highlighted it was back in September of 2009 (here) and it is up more than 50% since then. Here is a chart of today's action in SXC.TO showing a strong move higher once it surpassed its previous high of 72.31, followed by a pullback to this area. Two things to be cautious about: (1) this is a cross-listed stock that trades on US exchanges as SXCI and due to currency fluctuations and other discrepancies SXCI has not hit a new high (I've discussed this before with OTEX/OTC), (2) the US and Canadian markets continue to show weakness that implies traders are preferring to sell the highs rather than buy the dips.

Short term action:

The long term view of SXCI (US ticker that shows essentially the same trend as SXC.TO) illustrates that a simple system of buying on a new all-time high and using a 7 Average True Range trailing stop would get you into this trade in mid to late 2009 and let you ride it higher. I'm not advocating this approach across the board, but it provides a framework that every speculator must have: a systematic way to enter and exit trades that lets winners grow and cuts losers short.

I'll leave you with the words of Jesse Livermore,

"To be consistently successful, an investor or speculator must have rules to guide him. Certain guides which I utilize may be of no value to anyone else. Why is that so? If they are of inestimable value to me, why should they not serve you equally well? The answer to that is--no guide can be 100% right. ... I believe anyone who will take the time and trouble to study price movements should in time be able to develop a guide, which will aid him in future operations or investments."

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