From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1309 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Sunday, April 22 2001 Volume 02 : Number 1309 In this issue: Re: [CANSLIM] DGO Help Re: [CANSLIM] old leaders still leading Re: [CANSLIM] old leaders still leading Re: [CANSLIM] Weekly Scan Re: [CANSLIM] Gaps in the Nazdaq Re: [CANSLIM] Weekly Scan [CANSLIM] HGS List Re: [CANSLIM] HGS List Re: [CANSLIM] EPIQ ---------------------------------------------------------------------- Date: Sat, 21 Apr 2001 22:33:30 -0600 From: esetser Subject: Re: [CANSLIM] DGO Help I don't believe this is the case. The DG Printed Index should be part of the reports in DGO for everyone. AFAIK, there isn't any difference in DGO based on whether you subscribe to the printed product, or not, other than price. At 09:06 AM 4/19/01 -0700, you wrote: >Thanks for the info. > >So with DG Printed Edition, you also get software or >access to reserved websites not available to DG >online-only subscribers? > >I guess I need to subscribe to both then. On an >annual basis it's actually cheaper to subscribe to >both, but I thought I'd limit my cost to one month's >subscript. to see if I liked it prior to committing to >1year. > >Fred > >--- esetser wrote: >> You are probably referring to some of my posts. I >> use the report called >> "Daily Graphs Printed Product Co. Index". It has a >> couple columns of data >> that change daily. You can look this up in the help >> screens. For Industry >> Group and Industry Group RS, the report gives you >> these on Friday evening >> (and through the weekend). Although this isn't a >> full list of all stocks, >> it does list all of the stocks that make the DG >> printed lists, and I >> believe it is by far the largest database you can >> get in DGO. There is a >> general description that talks about how the stocks >> are selected also in >> the help area. At present, it includes 2853 stocks. >> In my estimation, >> this list will include all stocks of interest to >> classic CANSLIM investors. >> It does not include many of the smaller stocks that >> might be of interest >> to Tom or others who focus on small cap and smaller >> stocks. A couple of >> weeks ago, I went through the Weekend Review list to >> see how many and which >> stocks would NOT be in the DGO report. I found >> quite a few stocks missing, >> but all of the stocks were very thinly traded by my >> standards, and would >> have been screened out of my database anyway. >> >> Drop me a line if you need more data. >> >> At 08:32 AM 4/19/01 -0700, you wrote: >> >DGO users: >> >I believe there is a way in DGO to download a huge >> >table of all stocks in the db, including an >> industry >> >group column. Reason I believe this: about 2 >> months >> >ago someone posted such a file on this board. And >> >because of the usefulness of that file, I >> subscribed >> >to DGO, but cannot find that option. I found some >> >reports that look very similar, but they're all >> >pre-distilled. >> > >> >Do any other DGO users remember that posting? >> > >> >What I want to do is import all that into excel and >> do >> >some sorting on my target industries (which right >> now >> >are in the dumpster, but I'm inclined to look for >> some >> >bottom fish) >> > >> >Thanks, >> >Fred >> > >> >__________________________________________________ >> >Do You Yahoo!? >> >Yahoo! Auctions - buy the things you want at great >> prices >> >http://auctions.yahoo.com/ >> > >> >- >> >-To subscribe/unsubscribe, email >> "majordomo@xmission.com" >> >-In the email body, write "subscribe canslim" or >> >-"unsubscribe canslim". Do not use quotes in your >> email. >> > >> > >> >> - >> -To subscribe/unsubscribe, email >> "majordomo@xmission.com" >> -In the email body, write "subscribe canslim" or >> -"unsubscribe canslim". Do not use quotes in your >email. > >__________________________________________________ >Do You Yahoo!? >Yahoo! Auctions - buy the things you want at great prices >http://auctions.yahoo.com/ > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. > > - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: 22 Apr 2001 07:36:17 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] old leaders still leading I read them too, I think Ron is referring to the "former" _bear market_ leadership, not the _old, bull market_ leadership: "take a look at charts of other groups that still are strong, Leisure-Gamings, Health Services, Health Outpatient/Home, Tobacco etc. This tells me not all money managers are throwing their money at tech stocks. In fact, Leisure-Gaming broke out to a 52 week high this week." This is not surprising to me. techs are risky right now, fund managers are feeling the sting of withdrawals, and they need to be in safe stocks for a while (IMHO!). I am doing just fine thank you very much in a mixed bag of video games (Leisure-gaming, but misclassified (IMHO!) in comp software-edu), homebuilders, a few financials, education, and energy. I don't see the need to "bottom fish". You want high risks, go to the momentum boards on raging bull. Been there, done that, lost enough to know I don't want to play that game anymore. At 10:13 AM 4/21/2001 -0700, you wrote: >I was just reading the Ian's Forum >http://www.ianforum.com/nasdaq.htm >and noticed the statement "what is surprising to me is >that former strong groups have not rotated out." > >A few months ago I posted several times asking if >anyone saw candidates for new leadership. Obviously I >was too early. > >Now I repeat the request. Do any of you folks see new >leaders emerging? I was impressed by JNPR. I feel it >will move to replace CSCO. > >Any other candidates? > >Thanks >Kent Norman > >__________________________________________________ >Do You Yahoo!? >Yahoo! Auctions - buy the things you want at great prices >http://auctions.yahoo.com/ > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: 22 Apr 2001 07:49:52 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] old leaders still leading BTW, Ian's site has a new "group fundamental ranking" page at http://www.ianforum.com/gfrnew.htm which is a very easy to interpret and conveniently short watch list. It has many of the stocks I get off of the HGS Mining Co. site, plus some new ones that I intend to investigate today. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: 22 Apr 2001 07:56:19 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] Weekly Scan Dunno how you got your totals, but for anyone else using Excel to total the counts of the stocks in David's list, here's a formula to put in column B:=IF(A1=A2,B1+1,1). Put a 1 in cell B1 then copy this formula down the rest of the column. At 12:05 AM 4/22/2001 -0700, you wrote: >Here are the most frequently listed symbols > >Regards >Kent Norman > >CHBS 9 >ADVP 8 >SRCL 8 >ACF 7 >CHS 7 >GENZ 7 >ALLY 6 >BKH 6 >CECO 6 >COCO 6 >CPN 6 >ESCM 6 >HECO 6 >MEE 6 >MTON 6 >RDEN 6 >ROIL 6 >SGR 6 >SHFL 6 >SKE 6 >THQI 6 >UDS 6 >UTEK 6 > >--- David Squires wrote: > > > > > > > >__________________________________________________ >Do You Yahoo!? >Yahoo! Auctions - buy the things you want at great prices >http://auctions.yahoo.com/ > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 22 Apr 2001 09:56:12 -0500 From: "David Squires" Subject: Re: [CANSLIM] Gaps in the Nazdaq Tom, I understand, forgive my density! I most definitely see the same pattern in the COMPX as the NDX. Another interesting point about this rally is sentiment. In the Investor's Intelligence numbers bears moved up form 37 to 42.5 with bullish sentiment not budging near a low 44.7. These numbers will likely rise again next week as the market begins to correct a bit. Bears rising and bulls staying flat in the face of a rally is one of the most bullish things a market can do. So it appears we will get the 2 step rally a wrote about in my other email. Bottom line, the pullback should probably be bought here. Dave - ----- Original Message ----- From: "Tom Worley" To: Sent: Sunday, April 22, 2001 5:07 AM Subject: Re: [CANSLIM] Gaps in the Nazdaq > You gave a good example and chart of the Naz 100, I believe? I am > curious if you see the same pattern on the Naz Composite. > > Tom Worley > stkguru@netside.net > > > ----- Original Message ----- > From: David Squires > To: > Sent: Saturday, April 21, 2001 11:32 PM > Subject: Re: [CANSLIM] Gaps in the Nazdaq > > > Tom, > > I don't quite understand your question. Can you rephrase it? > > All the best, > > Dave > > ----- Original Message ----- > From: "Tom Worley" > To: > Sent: Saturday, April 21, 2001 4:31 PM > Subject: Re: [CANSLIM] Gaps in the Nazdaq > > > > David, > > > > It is my impression that the big caps on all exchanges got hit > > worse than those in the composites. > > > > Do you see the same thing when you look at the Naz Composite? > > > > Tom Worley > > stkguru@netside.net > > > > > > ----- Original Message ----- > > From: David Squires > > To: > > Sent: Saturday, April 21, 2001 12:24 AM > > Subject: Re: [CANSLIM] Gaps in the Nazdaq > > > > > > Dan, > > > > Gaps are always very interesting to me as well. Going in to the > > 4/16 session > > you had, in candlestick charting, a pattern known as a "three > gap > > play". In > > this pattern the largest gap is supposed to occur during the > last > > gap. In > > that situation a reversal should occur that fills all three > gaps. > > However, > > the only gap that was filled is the 4/11 gap. Another large gap > > occurred on > > 4/18 so one could say (speculate) the three gap play is again > in > > play. Of > > course, the power the market has displayed recently must be > > respected but I > > would guess at a minimum the NASDAQ should fill the gap at > 1700. > > If we get > > down that low that gap will provide significant support. If we > > blow that out > > the market will be "magnetized" to the lower gaps most likely. > > Lastly, the > > chart shows three interesting things...we are overbought in a > > downtrend and > > we are at an 8 month downtrend line. The combination of gaps > > underneath, > > overbought in a downtrend and the downtrend line suggest a > > confluent > > resistance point currently. Finally, if you look at the > previous > > rally you > > can see it is just about the same length as this one, 685 to > 633 > > points to > > be exact. Markets tend to repeat and this rally may be a repeat > > of the last, > > suggesting a termination point soon. > > > > I am not suggesting a new low here. The market has tipped its > > hand too much > > to suggest this in the short-term. My feeling is this will be a > 2 > > step rally > > up that will likely match the May to August rally of last year. > > This fits > > well into market waves as this would be wave 4 allowing for the > > final > > selloff wave 5 double bottom. > > > > Chart Attached > > > > BTW, This is the NDX 100 not the COMPX. > > > > Good Trading, > > DSquires > > > > From: "Dan" > > To: > > Sent: Friday, April 20, 2001 10:16 PM > > Subject: [CANSLIM] Gaps in the Nazdaq > > > > > While looking at some charts this evening, I noticed four > gaps > > after the > > > index came off the resent low. Are not gaps suppose to be > > filled before > > > continuance of trend? If so, it seems that four might render > > it > > > vulnerable for some profit taking. > > > > > > Any Gapologists have insight? > > > > > > Dan > > > > > > > > > > > > > --------------------------------------------------------------- > -- > > ----------- > > ---- > > > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: 22 Apr 2001 07:59:45 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] Weekly Scan P.S. HECO is being bought. At 12:05 AM 4/22/2001 -0700, you wrote: >Here are the most frequently listed symbols > >Regards >Kent Norman > >CHBS 9 >ADVP 8 >SRCL 8 >ACF 7 >CHS 7 >GENZ 7 >ALLY 6 >BKH 6 >CECO 6 >COCO 6 >CPN 6 >ESCM 6 >HECO 6 >MEE 6 >MTON 6 >RDEN 6 >ROIL 6 >SGR 6 >SHFL 6 >SKE 6 >THQI 6 >UDS 6 >UTEK 6 Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: 22 Apr 2001 08:12:02 -0700 From: "Tim Fisher" Subject: [CANSLIM] HGS List - --=====================_3204267==_ Content-Type: text/plain; charset="us-ascii"; format=flowed These are HGS stocks from HGS Mining Co's "Cream of the Crop" scan with decent charts. They are all >2x the 52-wk low, ADV>10k, price >$10. - --=====================_3204267==_ Content-Type: text/plain; charset="us-ascii" Stock,HGS Group,Scan Group,ERG,E,R,G,Curr G Speed,Prev G Speed,A/D,SMR,Growth,Curr Earn,Prev Earn,Curr Sales,Prev Sales,Proj Earn,Ians Box,Group,Exchange,Price,EPS Due,Date Added NVR,2,1,297,99,99,99,0,0,C,A,70,107,58,23,14,16,1,BUILD_RES,AMEX,170.6,4/27/2001,11-Aug MDC,2,1,296,99,98,99,0,0,A,A,57,41,54,21,17,4,3,BUILD_RES,NYSE,42,7/19/2001,20-Oct HOV,2,1,294,96,99,99,0,0,A,C,24,147,105,14,19,32,7,BUILD_RES,NYSE,15.91,6/7/2001,9-Mar LEN,2,1,293,98,96,99,0,0,A,A,31,88,67,72,78,29,5,BUILD_RES,NYSE,43.22,6/20/2001,22-Sep PHM,2,1,292,97,96,99,0,0,B,B,44,26,36,9,8,5,6,BUILD_RES,NYSE,42.86,4/25/2001,23-Mar SHFL,1,1,292,96,99,97,0,0,A,A,40,31,69,32,43,23,6,LEIS_GAMES,NASD,24.95,5/22/2001,12-Jan SRCL,,1,291,95,98,98,2,5,B,B,74,30,16,46,219,27,3,POLUTE_SERVICE,NASD,46.75,5/4/2001,23-Mar ACF,,1,290,99,97,94,5,5,A,A,47,71,58,67,58,58,5,FIN_CONSUMER,NYSE,43.8,8/3/2001,30-Mar IGT,1,1,290,97,96,97,0,0,B,A,20,106,113,59,46,42,7,LEIS_GAMES,NYSE,55.6,7/20/2001,26-Jan RJR,,1,288,93,97,98,0,-1,C,C,61,27,25,2,3,17,3,TOBACCO,NYSE,55.17,7/20/2001,23-Feb CHBS,1,1,286,98,99,89,-2,-2,A,A,75,56,86,50,44,21,2,RET_CLOTHES,NASD,37.7,6/14/2001,5-Jan CHIC,1,1,285,97,99,89,-2,-2,B,A,41,40,52,35,48,33,6,RET_CLOTHES,NASD,29.72,7/13/2001,13-Apr CHS,1,1,285,99,97,89,-2,-2,C,A,83,72,87,75,73,27,2,RET_CLOTHES,NYSE,43.91,5/25/2001,13-Apr AEOS,1,1,283,96,98,89,-2,-2,B,A,114,33,24,48,27,25,3,RET_CLOTHES,NASD,34.98,5/16/2001,30-Mar HOTT,1,1,283,97,97,89,-2,-2,A,A,93,33,55,48,50,20,3,RET_CLOTHES,NASD,31.18,5/15/2001,5-Jan HSIC,1,1,283,94,98,91,1,-10,B,C,206,37,18,7,4,15,3,MEDDEN_SUPP,NASD,38,5/1/2001,30-Mar LNCR,,1,283,89,95,99,0,0,C,A,15,16,26,20,24,23,10,MED_OUTPAT,NASD,54.56,7/18/2001,6-Oct CPN,,1,282,99,96,87,3,-5,B,A,58,200,174,306,168,11,1,ENER_OTH,NYSE,51.89,4/27/2001,20-Apr SEI,1,1,277,86,97,94,2,5,C,B,4,208,900,57,82,27,7,O&F_FIELD,NYSE,19.46,5/5/2001,30-Mar ESI,1,1,276,94,98,84,6,4,A,A,18,25,122,16,21,18,9,COMM_SCHOOL,NYSE,33.21,7/13/2001,13-Apr UVV,,1,276,83,95,98,0,-1,B,C,18,19,5,-4,-17,4,10,TOBACCO,NYSE,38.1,5/4/2001,2-Feb ALLY,1,4,274,78,99,97,0,0,A,-,NA,180,700,15,2,-,7,LEIS_GAMES,NASD,24,5/5/2001,9-Mar STRA,1,1,270,90,96,84,6,4,B,A,15,13,40,8,14,11,10,COMM_SCHOOL,NASD,37.35,4/25/2001,13-Apr PFGC,2,1,269,92,94,83,-4,-1,C,C,17,24,21,23,30,20,10,RETWHL_FOOD,NASD,51.55,5/2/2001,13-Apr SGR,,2,269,93,99,77,13,-1,A,B,26,27,41,97,178,41,6,METAL_PROCESS,NYSE,59.96,7/7/2001,9-Mar SKX,1,2,268,98,98,72,-8,-1,C,A,157,225,67,72,66,39,1,SHOES,NYSE,28.31,5/3/2001,20-Apr FED,,2,265,94,95,76,-7,0,C,A,43,34,17,23,26,17,6,FIN_S&L,NYSE,29.49,4/26/2001,20-Apr ATK,1,1,263,86,96,81,-12,-1,B,B,15,14,18,-11,-2,14,10,ELEC_MILITARY,NYSE,85.5,5/11/2000,26-Jan DME,,2,262,90,96,76,-7,0,B,A,30,29,5,21,14,15,6,FIN_S&L,NYSE,33.6,7/12/2001,20-Apr GCO,1,2,261,93,96,72,-8,-1,B,A,20,31,44,28,26,17,9,SHOES,NYSE,26.28,5/23/2001,20-Apr MME,2,2,259,96,93,70,21,8,C,B,66,41,47,11,11,18,3,MED_HMO,NYSE,19,5/10/2001,20-Apr WM,,2,259,92,91,76,-7,0,C,A,38,39,18,25,16,28,6,FIN_S&L,NYSE,50.39,7/19/2001,20-Apr BWS,1,2,258,90,96,72,-8,-1,B,C,49,32,9,14,8,10,6,SHOES,NYSE,18.74,5/17/2001,20-Apr BPFH,1,4,257,79,94,84,-2,3,C,A,18,40,-17,-*,56,16,9,BANK_NE,NASD,19.15,7/20/2001,20-Apr DORL,,2,255,95,98,62,-20,-12,B,A,27,33,23,-,32,21,6,FIN_MORTSVCS,NASD,31.01,7/12/2001,13-Apr KWK,1,2,254,98,95,61,-8,-22,B,B,71,163,225,178,118,39,1,O&G_USEXPL,AMEX,12.26,5/15/2001,20-Apr RTEC,1,4,250,78,94,78,42,39,B,A,NA,133,999,124,95,-1,7,ELEC_SEMIEQIUP,NASD,51,4/24/2001,13-Apr ROIL,1,4,237,78,98,61,-8,-22,B,A,NA,262,999,91,171,-10,7,O&G_USEXPL,NASD,15,5/11/2001,20-Apr SKE,1,2,235,80,94,61,-8,-22,B,A,NA,394,999,307,189,76,7,O&G_USEXPL,NYSE,44.7,4/27/2001,20-Apr HSE,1,4,234,78,95,61,-8,-22,C,A,NA,283,188,114,85,92,7,O&G_USEXPL,NYSE,45.6,4/26/2001,20-Apr - --=====================_3204267==_-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: 22 Apr 2001 08:17:42 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] HGS List That was _supposed_ to attach as a .csv file. Since it didn't, you need to clip the list and paste it into excel, then do "data,text to columns", and select a comma as the delimiter. At 08:12 AM 4/22/2001 -0700, you wrote: >These are HGS stocks from HGS Mining Co's "Cream of the Crop" scan with >decent charts. They are all >2x the 52-wk low, ADV>10k, price >$10. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 22 Apr 2001 10:18:10 -0500 From: "David Squires" Subject: Re: [CANSLIM] EPIQ This is a multi-part message in MIME format. - ------=_NextPart_000_0024_01C0CB15.88243580 Content-Type: multipart/alternative; boundary="----=_NextPart_001_0025_01C0CB15.88243580" - ------=_NextPart_001_0025_01C0CB15.88243580 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Tom, All goods points and targets. I never look at PE so that was not part of = my last analysis. Mark Boucher (recent No. 1 hedge fund manager in the = world) actually has an excellent trail stop method based on valuation. I = have included his text below. My stop was on the weekly chart and came = from the first swing low under what I see as weekly chart support. = However, if you know the stock well enough to get out and then get back = in then that's probably the better strategy. I have always found this is = much harder in practice then theory. Dave My Best Trailing Stop Techniques=20 By Mark Boucher Most investors and traders spend far too much time focusing on how to = enter a stock, and far too little time focusing on how to best exit a = profitable position. What is particularly interesting regarding this = neglect is that most traders make the vast majority of their profits in = a year from just one to five trades that move substantially in their = favor. Thus most traders would actually do better to focus in on how to = better exit heavily profitable trades than they would to further refine = their entry techniques. I would like to briefly go over some of our best = "trailing stop" techniques to help traders learn how to exit profitable = trades much more profitably. We use a number of trailing stop = techniques, but the simple rules of thumb we present here should greatly = enhance the trading of most investors. PATIENT INITIALLY, CAUTIOUS WHEN PRICEY The method we're going to briefly cover is used before a stock becomes = overvalued.=20 - --waiting for the breakout of a three- to four-week or longer = consolidation=20 - --putting stops below the low of that consolidation after you've just = entered a stock (as long as it is not becoming overpriced on a = price/earnings basis)=20 This requires patience for the first quarter of a move after you've = entered a stock (first 50 or so bars after a trade on any timeframe).=20 However, when a stock starts to get a PE ratio that is both higher than = its historical high PE and above its forward one-to-three year growth = rate projected by Wall Street analysts, then it is potentially becoming = overvalued, and investors should tighten up trailing stops much more = aggressively.=20 Once a stock becomes overvalued, it is generally in a blow-off. A = blow-off can last from weeks to months, and occasionally years - so the = trick is to stick with a stock for as long as it is likely to continue = running up, no matter how high the price and PE. This is the essence of = attempting to let profits run.=20 Thus, when a stock rises to a PE ratio that is both higher than its = historical high PE and above its projected (by consensus analysts) = growth rate for the next one to three years, we use a different = technique than the one we used before the stock becomes overvalued.=20 When a stock becomes overvalued, we watch for any decline in the close = for two days in a row. Once we have a two-day in a row decline in the = close, we consider that stock to be in a "reaction". Once a stock is in = a reaction, we wait for it to recover to new highs. On any new high = following a reaction, we will then move our trailing stop to the low of = that reaction -- and we'll keep moving it up in this manner on every = reaction and subsequent new high. In this way we are still waiting for a = fairly significant support point to be broken on the downside before = exiting a stock, but we are moving our stops up much more aggressively = than is the case prior to the stock becoming overvalued. Let's take a brief look at how this works in the real world using actual = trades we made from 1999. These stocks also appeared on Mark Boucher's = Web page in TradeHard.com.=20 Adobe (ADBE) broke out to new 52-week highs in March, 1999, and then = developed a nice, tight trading range from late-March to mid-April, = creating just the type of flag pattern we like to watch for an entry = signal. It was exhibiting strong relative strength, strong EPS rank, = strong quarterly earnings growth, had very strong earnings growth = estimates for the next year, was the leader in its field, and was being = re-accumulated by funds--meaning that it met most of our criteria for a = runaway stock with fuel to go much higher.=20 When the four-week consolidation was broken to the upside in April (near = the 30 level) we started buying ADBE for clients, it started appearing = on our Tradehard.com list of new highs, and it appeared in our Portfolio = Strategy Letter (PSL) model portfolio in the April edition.=20 The first trading range of three-four weeks following our entry occurred = in May, when ADBE declined from 40.53 to 33 1/2, a fairly large dip. In = June, ADBE broke out of this consolidation to new highs, and we = instigated our first trailing stop rule, using trailing stop at 33, and = we were finally able to "lock in" a profit by having our stop above our = entry price. Other three-to-four-week-plus consolidations developed in = July-August and in August-September, allowing us to again raise our = stops via the three-to-four-week-plus consolidation and new high rule.=20 Then in October ADBE took off and began to trade above a P/E of 40. = Forty had been a high P/E for the last three years and was above = earnings growth estimates for the next two years after the one-year = spike in earnings expected in 1999. This meant ADBE was potentially = becoming overvalued, and was potentially undergoing a blow-off in price. = Thus in October we began to use our tighter trailing stop method on = ADBE. Every time ADBE made a two-day-in-a-row decline and then later = broke to new highs, we would move our stop below the low of that = reaction.=20 On Nov. 1 and 2 ADBE made a two-day in a row decline. On Nov. 4 ADBE = bottomed at 67 1/8 and then made a new high on 11/8. This was nothing = close to a three-week-plus consolidation, but since we were in = potentially overvalued territory, we used an open protective stop (OPS) = at 66 3/4 (just below 67 1/8). The stock continued to explode to 79 = before collapsing, and we were stopped out via our 66 3/4 OPS in = early-December as ADBE began a decline to the 50's.=20 While we didn't catch the top perfectly, we caught the lion's share of = this nice move, and we caught more of the move by using a trailing stop = than we would have had we just began selling the position in October, = when it first began to look overvalued Our final example is a foreign stock traded on the NASDAQ, Business = Objects (BOBJ). In mid-June, BOBJ broke out of a two-month consolidation = on the upside on a high-volume thrust and lap. It showed strong RS, = exploding earnings growth, increasing-but-low ownership by funds, and = other elements of our runaway criteria. We began buying BOBJ near the 30 = level, and put it into our PSL model portfolio in June.=20 BOBJ made a new high in July, corrected to the 37 level, and then = consolidated for two months before making a new 52-week high again - = which allowed us to move our trailing stops to just below 37 where we = locked in a profit via our trailing stops.=20 BOBJ took off on a runaway up-move, and in November it moved above a P/E = of 90 (its projected earnings growth for the next year and a historic PE = high). Thus in November we switched to our tighter trailing stop = technique. On 1/6/00 BOBJ hit our stop at 115, below the Dec. 14, 1999 = lows, and we took some very healthy profits.=20 In Conclusion=20 Remember no trailing stop technique is perfect. Trailing stops will = often take you out of a stock that ends up moving further in the desired = direction. But even more often, the trailing stop will prevent you from = letting your open profits erode substantially in a stock that has peaked = for a considerable period of time. You can always re-enter a stock if it = meets your criteria on a new breakout. Trailing stops therefore not only = help you to let your profits run and prevent you from giving back huge = portions of open profit, but they also help you to focus your trading = capital on vehicles that are moving up strongly, right now, and exit = those that are in prolonged corrections.=20 ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Sunday, April 22, 2001 6:14 AM Subject: Re: [CANSLIM] EPIQ Hi David, Of course, I certainly hope you are right that this stock is only at = the start of greatness!! But with a present trailing PE of 52, a = projected PE of 40, and a historic PE range up to 70 or so, it doesn't = seem to me to have much further room to roam. I also am confused by your reference to setting a stop at 9 1/16. = Did you possibly mean 19, not 9? (I currently have a mental trailing = stop of 15% at 21.25). And using my usual target setting of 2X the 200 DMA and 1.5X the 50 = DMA, my target remains 25 to 27. And if the stock is going to correct 15% or more, why not sell now (or = on any spike up further), then wait for the correction to buy back in? = I've gotten away with that three times before, and not always when it = was valued as high as present multiples. - ------=_NextPart_001_0025_01C0CB15.88243580 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Tom,
 
All goods points and targets. I never look at PE so = that=20 was not part of my last analysis. Mark Boucher (recent No. 1 hedge = fund=20 manager in the world) actually has an excellent trail stop method = based on=20 valuation. I have included his text below. My stop was on = the=20 weekly chart and came from the first swing low under what I see as = weekly chart=20 support. However, if you know the stock well enough to get out and then = get back=20 in then that's probably the better strategy. I have always found this is = much=20 harder in practice then theory.
 
Dave
 
 
 
 
My Best = Trailing Stop=20 Techniques
By Mark=20 Boucher


Most=20 investors and traders spend far too much time focusing on how to enter a = stock,=20 and far too little time focusing on how to best exit a profitable = position. What=20 is particularly interesting regarding this neglect is that most traders = make the=20 vast majority of their profits in a year from just one to five trades = that move=20 substantially in their favor. Thus most traders would actually do better = to=20 focus in on how to better exit heavily profitable trades than they would = to=20 further refine their entry techniques. I would like to briefly go over = some of=20 our best "trailing stop" techniques to help traders learn how to exit = profitable=20 trades much more profitably. We use a number of trailing stop = techniques, but=20 the simple rules of thumb we present here should greatly enhance the = trading of=20 most investors.

PATIENT INITIALLY, CAUTIOUS WHEN PRICEY

The method we're going to briefly cover is used before a stock = becomes=20 overvalued.=20

--waiting for the breakout of a three- to four-week or longer = consolidation=20

--putting stops below the low of that consolidation after you've just = entered=20 a stock (as long as it is not becoming overpriced on a price/earnings = basis)=20

This requires patience for the first quarter of a move after you've = entered a=20 stock (first 50 or so bars after a trade on any timeframe).=20

However, when a stock starts to get a PE ratio that is both higher = than its=20 historical high PE and above its forward one-to-three year growth rate = projected=20 by Wall Street analysts, then it is potentially becoming overvalued, and = investors should tighten up trailing stops much more aggressively.=20

Once a stock becomes overvalued, it is generally in a blow-off. A = blow-off=20 can last from weeks to months, and occasionally years - so the trick is = to stick=20 with a stock for as long as it is likely to continue running up, no = matter how=20 high the price and PE. This is the essence of attempting to let profits = run.=20

Thus, when a stock rises to a PE ratio that is both higher than its=20 historical high PE and above its projected (by consensus analysts) = growth rate=20 for the next one to three years, we use a different technique than the = one we=20 used before the stock becomes overvalued.=20

When a stock becomes overvalued, we watch for any decline in the = close for=20 two days in a row. Once we have a two-day in a row decline in the close, = we=20 consider that stock to be in a "reaction". Once a stock is in a = reaction, we=20 wait for it to recover to new highs. On any new high following a = reaction, we=20 will then move our trailing stop to the low of that reaction -- and = we'll keep=20 moving it up in this manner on every reaction and subsequent new high. = In this=20 way we are still waiting for a fairly significant support point to be = broken on=20 the downside before exiting a stock, but we are moving our stops up much = more=20 aggressively than is the case prior to the stock becoming = overvalued.

Let's take a brief look at how this works in the real world using = actual=20 trades we made from 1999. These stocks also appeared on Mark Boucher's = Web page=20 in TradeHard.com.

Adobe (ADBE) broke out to new 52-week highs in March, 1999, and then=20 developed a nice, tight trading range from late-March to mid-April, = creating=20 just the type of flag pattern we like to watch for an entry signal. It = was=20 exhibiting strong relative strength, strong EPS rank, strong quarterly = earnings=20 growth, had very strong earnings growth estimates for the next year, was = the=20 leader in its field, and was being re-accumulated by funds--meaning that = it met=20 most of our criteria for a runaway stock with fuel to go much higher.=20

When the four-week consolidation was broken to the upside in April = (near the=20 30 level) we started buying ADBE for clients, it started appearing on = our=20 Tradehard.com list of new highs, and it appeared in our Portfolio = Strategy=20 Letter (PSL) model portfolio in the April edition.=20

The first trading range of three-four weeks following our entry = occurred in=20 May, when ADBE declined from 40.53 to 33 1/2, a fairly large dip. In = June, ADBE=20 broke out of this consolidation to new highs, and we instigated our = first=20 trailing stop rule, using trailing stop at 33, and we were finally able = to "lock=20 in" a profit by having our stop above our entry price. Other=20 three-to-four-week-plus consolidations developed in July-August and in=20 August-September, allowing us to again raise our stops via the=20 three-to-four-week-plus consolidation and new high rule.=20

Then in October ADBE took off and began to trade above a P/E of 40. = Forty had=20 been a high P/E for the last three years and was above earnings growth = estimates=20 for the next two years after the one-year spike in earnings expected in = 1999.=20 This meant ADBE was potentially becoming overvalued, and was potentially = undergoing a blow-off in price.=20

Thus in October we began to use our tighter trailing stop method on = ADBE.=20 Every time ADBE made a two-day-in-a-row decline and then later broke to = new=20 highs, we would move our stop below the low of that reaction.=20

On Nov. 1 and 2 ADBE made a two-day in a row decline. On Nov. 4 ADBE = bottomed=20 at 67 1/8 and then made a new high on 11/8. This was nothing close to a=20 three-week-plus consolidation, but since we were in potentially = overvalued=20 territory, we used an open protective stop (OPS) at 66 3/4 (just below = 67 1/8).=20 The stock continued to explode to 79 before collapsing, and we were = stopped out=20 via our 66 3/4 OPS in early-December as ADBE began a decline to the = 50's.=20

While we didn't catch the top perfectly, we caught the lion's share = of this=20 nice move, and we caught more of the move by using a trailing stop than = we would=20 have had we just began selling the position in October, when it first = began to=20 look overvalued

Our final example is a foreign stock traded on the NASDAQ, Business = Objects=20 (BOBJ).=20 In mid-June, BOBJ broke out of a two-month consolidation on the upside = on a=20 high-volume thrust and lap. It showed strong RS, exploding earnings = growth,=20 increasing-but-low ownership by funds, and other elements of our runaway = criteria. We began buying BOBJ near the 30 level, and put it into our = PSL model=20 portfolio in June.

BOBJ made a new high in July, corrected to the 37 level, and then=20 consolidated for two months before making a new 52-week high again - = which=20 allowed us to move our trailing stops to just below 37 where we locked = in a=20 profit via our trailing stops.=20

BOBJ took off on a runaway up-move, and in November it moved above a = P/E of=20 90 (its projected earnings growth for the next year and a historic PE = high).=20 Thus in November we switched to our tighter trailing stop technique. On = 1/6/00=20 BOBJ hit our stop at 115, below the Dec. 14, 1999 lows, and we took some = very=20 healthy profits.=20

In Conclusion=20

Remember no trailing stop technique is perfect. Trailing stops will = often=20 take you out of a stock that ends up moving further in the desired = direction.=20 But even more often, the trailing stop will prevent you from letting = your open=20 profits erode substantially in a stock that has peaked for a = considerable period=20 of time. You can always re-enter a stock if it meets your criteria on a = new=20 breakout. Trailing stops therefore not only help you to let your profits = run and=20 prevent you from giving back huge portions of open profit, but they also = help=20 you to focus your trading capital on vehicles that are moving up = strongly, right=20 now, and exit those that are in prolonged corrections.

 

 

----- Original Message -----
From:=20 Tom = Worley=20
Sent: Sunday, April 22, 2001 = 6:14=20 AM
Subject: Re: [CANSLIM] = EPIQ

Hi David,
 
Of course, I certainly hope you are right that = this stock is=20 only at the start of greatness!!  But with a present trailing PE = of 52, a=20 projected PE of 40, and a historic PE range up to 70 or so, it doesn't = seem to=20 me to have much further room to roam.
 
I also am confused by your reference to setting a = stop at 9=20 1/16.   Did you possibly mean 19, not 9?  (I currently = have a=20 mental trailing stop of 15% at 21.25).
 
And using my usual target setting of 2X the 200 = DMA and 1.5X=20 the 50 DMA, my target remains 25 to 27.
 
And if the stock is going to correct 15% or more, = why not=20 sell now (or on any spike up further), then wait for the correction to = buy=20 back in? I've gotten away with that three times before, and not always = when it=20 was valued as high as present multiples.
 
 
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