RE: [CANSLIM] Moving Average CrossOver

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Moving Average CrossOver
Date: Wed, 27 Aug 2003 14:32:07 -0500

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Hi Yien,

I'd be careful making any generalizations about a strategy like this. While
there are those that believe it to be a viable strategy, understanding what
is and isn't happening on a 50/200 crossover is important.

For example, a base can and does occur at any point in a pattern. Sometimes
a the stock will form a bottoming base, as many have at the end of a bear
market. Others will base somewhere in their rising action. That base can
form above the 50/200, partially between the 50/200, or even a bit under the
200. That means that if you make a generalized statement that entries at the
50/200 crossover are always sound, you'll get in big trouble. A crossover
can occur, but the base might be ill-formed or too early in its formation.
In either of those cases, the crossover can occur, but then the price action
could easily turn South again. If a stock is moving somewhat sideways, this
50/200 crossover can happen again and again over many months. You might use
this as a way of getting your eye on stocks while they're basing, but you're
far better off waiting until the stock finishes the base and indicates it's
ready to move onward and upward by breaking away strongly from an
identifiable and valid pivot.


Katherine


- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Yien T Lung
Sent: Wednesday, August 27, 2003 2:07 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Moving Average CrossOver



Hi guys


I have been looking at the charts of the recent winners this year, and I
have noticed that whenever the 50MA crosses over the 200MA, on strong
volume that is, it is usually a good indicator for a major run up. I am
wondering if anybody here would have prior experiences using this
methodology.

thanks

Yien




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