When you're accused of insider trading, etiquette demands that you present some alternative explanation of why you just happened to do exactly the right thing at exactly the wrong time. Saying you were lucky doesn't cut it. (The standard response these days is to claim that you heard the stock mentioned on CNBC. Ivan Boesky fended off the SEC for more than a decade by claiming he got his takeover ideas from reading the newspaper.)

Martha Stewart knows nothing if not etiquette, so when it came out that she had sold her nearly 4,000 shares of ImClone on Dec. 27, the day before the company announced the FDA would deny approval to its cancer drug, Stewart had a ready explanation: She claimed that she had arranged with her broker in November to sell the stock if it dipped below $60.

Stewart denies she had any secret stock-moving information on ImClone, and many of the facts uncovered so far jibe with her story. The stock did dip below $60 the day she sold. Phone records back up that her broker first called her; she returned the call and then, after the trade was executed, called her friend Samuel Waksal, ImClone's CEO.

Still, Merrill Lynch announced Friday it suspended her broker, Peter Bacanovic, who happens to be a former ImClone employee and who helped Waksal's daughter sell her ImClone stock the day before. One theory is that Bacanovic could just as easily have tipped off Stewart as Waksal.

And Stewart's account of how and why she sold at $60 is puzzling for some who trade stocks regularly. Normally an arrangement to sell at a set price has a formal name, a stop-loss order, and a highly formal procedure that results in a customer getting receipts in the mail. No paperwork for a stop-loss order has been produced so far. If that order had been in place, there would have been no need for Stewart and her broker to talk at all.

"What she said was not understood by the broker as a formal stop-loss," says Jack Coffee, a securities law professor at Columbia. "He seems to have treated this much more as a conversation, a reminder to call her at 60."

There is some confusion about stop-loss orders for Nasdaq stocks. Policies vary from firm to firm. Not every firm accepts stop-loss orders for a particular stock. But Merrill was a dealer in ImClone, so it could have handled such an order. According to the Wall Street Journal, Merrill's policy did not require Bacanovic to enter the order in Merrill's computer.

Other evidence suggests that Stewart didn't have a formal stop-loss order. The whole point of a stop-loss order is to sell a stock as it slides, not after. But the sale of her stock was delayed: She unloaded it at $58, not $60, costing her nearly $8,000. A client with an official stop-loss would be upset if her broker didn't sell when he was supposed to.

 Then there's the matter of the $60 price target. A price target is not something a trader whips up informally out of scraps of dryer lint and taffeta. People who set price targets normally see stocks through the lens of technical analysis. Their main technique is drawing two lines on a stock chart to pen in the range where a stock tends to trade. If the stock breaks through the top "resistance" line, they think something good is up, so they buy. If it drops below "support," they sell because it's going to drop further. Perhaps the freakiest thing about technical analysis is that it actually works.

Whether Stewart, a former broker herself, or Bacanovic used technical analysis is unknown, but it's something they would be familiar with. Would $60 have been a reasonable target to set for ImClone? It all depends on how far back in the stock chart you look and whether you are a short-term or long-term trader. (Stewart said in her statement that she bought the stock "several years ago," probably for less than $20, since that was its range before 2000.)