Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: Re: [CANSLIM] breakouts - return to base
Date: Mon, 10 Dec 2001 21:15:23 -0500
Next Article (by Date): RE: [CANSLIM] breakouts - return to base "John Adair"
Top of Thread: RE: [CANSLIM] breakouts - return to base "John Adair"
Next in Thread: RE: [CANSLIM] breakouts - return to base "John Adair"
Articles sorted by: [Date]
[Author]
[Subject]
This is a multi-part message in MIME format.
- ------=_NextPart_000_004A_01C181BF.C84B4FC0
Content-Type: text/plain;
charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
I currently have ten stocks in my VR fund (all bought since 8/6/01) that =
are up 25% to 70%. There are about 40 stocks in all in the portfolio. I =
have taken profits on only one of these ten so far.
Overall the fund is up 6.5% since inception, and 21% so far this =
quarter. It is geared towards intermediate and long term investing, just =
like my IRA.
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----=20
From: camelot.homes@charter.net=20
To: canslim@lists.xmission.com=20
Sent: Monday, December 10, 2001 9:02 PM
Subject: Re: [CANSLIM] breakouts - return to base
katherine, of course as long as the 123 effect is in place the profits =
will probably be small. also, it seems like if a stock returns 50-200% =
it seems like to me one should own 2-5 stocks at anytime instead of 6-10 =
stocks. david
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Monday, December 10, 2001 7:00 PM
Subject: Re: [CANSLIM] breakouts - return to base
David,
=20
I think it depends on your investment strategy. If you are =
intentionally playing a short term trend, small profits 5-20% might be =
ok. On the other hand, the goal of moving into the intermediate time =
frame is to find the right combination of fundamentals and technicals so =
the ride can be far greater. A good ride in a good market could easily =
get you far more than 5-20%. It's not uncommon to get nice 50-60% =
returns in a few months. That's why you want to really understand =
price/volume action so that you can determine if the stock remains =
healthy in its upward intermediate term advance. Small pullbacks here =
and there mean little over this time frame. It's repeated high volume =
pull backs (distribution) that are problematic. One of the things that =
always stuck with me from Nicholas Darvas' book "How I made $2 million =
in the Stock Market" was the simple phrase "I have no reason to sell a =
stock that's rising." In other words, skipping town too early could very =
well lower your overall investment return.
=20
If your strategy is a swing strategy of 1-10 days or so, a =
consistent 5-10% return on each position would certainly garner a high =
return overall. But the entries are based on pricing patterns and the =
candidates mined from stocks with enough volatility to move swiftly in a =
few days. Very different strategy than CANSLIM.
=20
Katherine
----- Original Message -----=20
From: camelot.homes@charter.net=20
To: canslim@lists.xmission.com=20
Sent: Monday, December 10, 2001 6:24 PM
Subject: Re: [CANSLIM] breakouts - return to base
katherine and chris, sorry i have been away. i always wonder if =
the most likely breakout will rise 5 to 20%-is it better to take those =
small profits on alot of stocks, then wait longer for possible bigger =
profits? david
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Monday, December 10, 2001 12:40 PM
Subject: Re: [CANSLIM] breakouts - return to base
Chris,
=20
Just a clarification. The 75% return rate is a pullback within =
the first 12 days (this is the average for the study). Bulkowski states =
that none take longer than 30 days. After that, it goes beyond throwback =
and falls into "normal price action" territory.
=20
With regard to the WON 20% rule and profit taking. Bulkowski =
gives some statistics that I think throw some light. He says that 47% of =
stocks reach a high after breakout in less than 3 months. 35% take =
longer than 6 months. Most likely rise? 10-20%. Average rise? 38%. His =
frequency distribution shows that the longer it takes to reach the peak, =
the larger the average gain.
=20
So think about what that means in terms of WON sell guidelines.=20
=20
(1) If the stock rises 20% in less than 8 weeks, suggests you =
hold on through the first correction
(2) Once it reaches 25% (and I'm assuming he then means, if it =
takes longer than 8 weeks to do that), THEN suggests taking some =
profits.
=20
But I also look for accumulation/distribution during these rises =
to assess whether the uptrend is persistent enough to carry the stock =
further than the 25%.
=20
In that context, makes a lot more sense!
=20
Katherine
----- Original Message -----=20
From: Chris Dempsey=20
To: canslim@lists.xmission.com=20
Sent: Monday, December 10, 2001 12:22 PM
Subject: RE: [CANSLIM] breakouts - return to base
Katherine, David, and All others interested
=20
I remember reading that WON says 40% of breakouts return to =
the base. I believe it is more than that. I'm not sure that it is 75%, =
but it might be. For that reason WON states in his book you must take =
some profits when they hit 20%. On one of the IBD tapes they state to =
profits in 1/2 of positions reaching 25%. These are because of the high =
rate of pull backs. If you don't do this then you are forced to use the =
rule, don't let a winner turn into a loser.=20
=20
SCUR appears to be an example of a stock returning/nearly =
returning to the base.
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of =
camelot.homes@charter.net
Sent: Monday, December 10, 2001 9:49 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] low volume breakouts
hi katherine , thank you so much for this very good =
information! when bulkowski states that stocks retrace back to the b/o =
piont 75% of the time is he talking about high or low volume breakouts? =
and where is the best place to get a copy of his book? david
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Monday, December 10, 2001 5:10 AM
Subject: Re: [CANSLIM] low volume breakouts
Hi David,
=20
The question you ask is a good one. Demanding controlled =
study proof of a guideline like this is important, as it makes an =
underlying assumption about technical patterns which may or may not =
trigger a buy. I pulled out my "Encyclopedia of Chart Patterns" by =
Thomas Bulkowski to answer this question. In this book, the author does =
statistical studies on chart formation and there is an entire chapter =
devoted to the C&H. (pp.135-152).
=20
Before I state the author's conclusions, a general =
overview of WON's theory as to why volume should be high on the =
breakout. That is, you are looking for the point at which demand so =
outweighs supply that the price moves up and onward. In my own personal =
experience, low volume breakouts seem to fall back more often than not. =
But these are "odds" not specifics. SONC is a good example from recent =
discussions on the list. Take a look at the daily chart from 10/3 to =
now. You can see that SONC tried very hard on several days to break out =
of its consolidation, but fell back and eventually gapped down. The low =
volume B/O's don't always mean the stock will fail, just that it's not =
yet ready to move on. I like to have the odds in my favor, so I'm always =
willing to wait until there's proof of the pudding.
=20
Back to Bulkowski. In the C&H formation, the failure rate =
is 26%. If you wait for an upside breakout, the failure rate falls to =
10%. Stocks retrace back to the B/O point 75% of the time (average time =
12 days). Waiting for the throwback increases the success rate another =
1%. Typical B/O volume is 180% above the prior day and stays high for =
the following week. Interestingly, he says removing the high volume B/O =
criteria does hurt performance, but only minimally. This is an excellent =
chapter on C&H and, based on the statistical evidence, the author makes =
other conclusions that lead to particular trading tactics. There are =
several additional criteria that WON would require of a stock forming a =
C&H and then breaking out, such as rising RS, high group RS, underlying =
fundamental characteristics, etc. that are not included in the author's =
study. My own conclusions, anecdotally, are that if these other criteria =
are met AND you get a high volume B/O, the odds are in your favor. (No =
statistical studies to back that up, however!)
=20
Katherine
=20
=20
----- Original Message -----=20
From: camelot.homes@charter.net=20
To: canslim@xmission.com=20
Sent: Sunday, December 09, 2001 5:44 PM
Subject: [CANSLIM] low volume breakouts
how often does a low volume breakout succeed past the =
pivot point versus a high volume breakout past the pivot point? david
- ------=_NextPart_000_004A_01C181BF.C84B4FC0
Content-Type: text/html;
charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META content=3D"text/html; charset=3Diso-8859-1" =
http-equiv=3DContent-Type>
<META content=3D"MSHTML 5.00.2314.1000" name=3DGENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=3D#ffffff>
<DIV><FONT size=3D2>I currently have ten stocks in my VR fund (all =
bought since=20
8/6/01) that are up 25% to 70%. There are about 40 stocks in all in the=20
portfolio. I have taken profits on only one of these ten so =
far.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Overall the fund is up 6.5% since inception, and 21% =
so far=20
this quarter. It is geared towards intermediate and long term investing, =
just=20
like my IRA.</FONT></DIV>
<DIV> </DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley<BR></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: =
0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:camelot.homes@charter.net"=20
title=3Dcamelot.homes@charter.net>camelot.homes@charter.net</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, December 10, 2001 =
9:02=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
breakouts - return=20
to base</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>katherine, of course as long as the =
123 effect is=20
in place the profits will probably be small. also, it seems like if a =
stock=20
returns 50-200% it seems like to me one should own 2-5 stocks at =
anytime=20
instead of 6-10 stocks. david</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:kmalm@earthlink.net" =
title=3Dkmalm@earthlink.net>Katherine=20
Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, December 10, =
2001 7:00=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
breakouts -=20
return to base</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>David,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I think it depends on your =
investment strategy.=20
If you are intentionally playing a short term trend, small profits =
5-20%=20
might be ok. On the other hand, the goal of moving into the =
intermediate=20
time frame is to find the right combination of fundamentals and =
technicals=20
so the ride can be far greater. A good ride in a good market could =
easily=20
get you far more than 5-20%. It's not uncommon to get nice 50-60% =
returns in=20
a few months. That's why you want to really understand price/volume =
action=20
so that you can determine if the stock remains healthy in its upward =
intermediate term advance. Small pullbacks here and there mean =
little over=20
this time frame. It's repeated high volume pull backs (distribution) =
that=20
are problematic. One of the things that always stuck with me from =
Nicholas=20
Darvas' book "How I made $2 million in the Stock Market" was the =
simple=20
phrase "I have no reason to sell a stock that's rising." In other =
words,=20
skipping town too early could very well lower your overall =
investment=20
return.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>If your strategy is a swing =
strategy of 1-10=20
days or so, a consistent 5-10% return on each position would =
certainly=20
garner a high return overall. But the entries are based on pricing =
patterns=20
and the candidates mined from stocks with enough volatility to move =
swiftly=20
in a few days. Very different strategy than CANSLIM.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Katherine</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:camelot.homes@charter.net"=20
title=3Dcamelot.homes@charter.net>camelot.homes@charter.net</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, December 10, =
2001 6:24=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
breakouts -=20
return to base</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>katherine and chris, sorry i have =
been away.=20
i always wonder if the most likely breakout will rise 5 to 20%-is=20
it better to take those small profits on alot of stocks, then =
wait=20
longer for possible bigger profits? david</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:kmalm@earthlink.net" =
title=3Dkmalm@earthlink.net>Katherine=20
Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
=
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, December =
10, 2001=20
12:40 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
breakouts -=20
return to base</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Chris,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Just a clarification. The 75% =
return rate=20
is a pullback within the first 12 days (this is the average for =
the=20
study). Bulkowski states that none take longer than 30 =
days. After=20
that, it goes beyond throwback and falls into "normal price =
action"=20
territory.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>With regard to the WON 20% rule =
and profit=20
taking. Bulkowski gives some statistics that I think throw some =
light.=20
He says that 47% of stocks reach a high after breakout in less =
than 3=20
months. 35% take longer than 6 months. Most likely rise? 10-20%. =
Average=20
rise? 38%. His frequency distribution shows that the longer it =
takes to=20
reach the peak, the larger the average gain.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>So think about what that means =
in terms of=20
WON sell guidelines. </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>(1) If the stock rises 20% in =
less than 8=20
weeks, suggests you hold on through the first =
correction</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>(2) Once it reaches 25% (and =
I'm assuming=20
he then means, if it takes longer than 8 weeks to do that), THEN =
suggests taking some profits.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>But I also look for=20
accumulation/distribution during these rises to assess whether =
the=20
uptrend is persistent enough to carry the stock further than the =
25%.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>In that context, makes a lot =
more=20
sense!</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Katherine</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:cdempsey@houston.oilfield.slb.com"=20
title=3Dcdempsey@houston.oilfield.slb.com>Chris Dempsey</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
=
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, December =
10, 2001=20
12:22 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] =
breakouts=20
- return to base</DIV>
<DIV><BR></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D619121018-10122001>Katherine, David, and All others=20
interested</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D619121018-10122001></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D619121018-10122001>I remember reading that WON says =
40% of=20
breakouts return to the base. I believe it is more than that. =
I'm not=20
sure that it is 75%, but it might be. For that reason WON =
states in=20
his book you must take some profits when they hit 20%. On one =
of the=20
IBD tapes they state to profits in 1/2 of positions reaching =
25%.=20
These are because of the high rate of pull backs. If you don't =
do this=20
then you are forced to use the rule, don't let a winner turn =
into a=20
loser. </SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D619121018-10122001></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D619121018-10122001>SCUR appears to be an example of a =
stock=20
returning/nearly returning to the =
base.</SPAN></FONT></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV align=3Dleft class=3DOutlookMessageHeader =
dir=3Dltr><FONT face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of=20
</B>camelot.homes@charter.net<BR><B>Sent:</B> Monday, =
December 10,=20
2001 9:49 AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM] =
low=20
volume breakouts<BR><BR></FONT></DIV>
<DIV><FONT face=3DArial size=3D2>hi katherine , thank you so =
much for=20
this very good information! when bulkowski states that =
stocks=20
retrace back to the b/o piont 75% of the time is he talking =
about=20
high or low volume breakouts? and where is the best place to =
get a=20
copy of his book? david</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message =
- ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; =
font-color: black"><B>From:</B>=20
<A href=3D"mailto:kmalm@earthlink.net"=20
title=3Dkmalm@earthlink.net>Katherine Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
=
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, =
December 10,=20
2001 5:10 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: =
[CANSLIM] low=20
volume breakouts</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Hi David,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>The question you ask is a =
good one.=20
Demanding controlled study proof of a guideline like this =
is=20
important, as it makes an underlying assumption about =
technical=20
patterns which may or may not trigger a buy. I pulled out =
my=20
"Encyclopedia of Chart Patterns" by Thomas Bulkowski to =
answer=20
this question. In this book, the author does statistical =
studies=20
on chart formation and there is an entire chapter devoted =
to the=20
C&H. (pp.135-152).</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Before I state the =
author's=20
conclusions, a general overview of WON's theory as to why =
volume=20
should be high on the breakout. That is, you are looking =
for the=20
point at which demand so outweighs supply that the price =
moves up=20
and onward. In my own personal experience, low volume =
breakouts=20
seem to fall back more often than not. But these are =
"odds" not=20
specifics. SONC is a good example from recent =
discussions on=20
the list. Take a look at the daily chart from 10/3 to now. =
You can=20
see that SONC tried very hard on several days to break out =
of its=20
consolidation, but fell back and eventually gapped down. =
The low=20
volume B/O's don't always mean the stock will fail, just =
that it's=20
not yet ready to move on. I like to have the odds in my =
favor, so=20
I'm always willing to wait until there's proof of the=20
pudding.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Back to Bulkowski. In the =
C&H=20
formation, the failure rate is 26%. If you wait for an =
upside=20
breakout, the failure rate falls to 10%. Stocks retrace =
back to=20
the B/O point 75% of the time (average time 12 days). =
Waiting for=20
the throwback increases the success rate another 1%. =
Typical B/O=20
volume is 180% above the prior day and stays high for the=20
following week. Interestingly, he says removing the high =
volume=20
B/O criteria does hurt performance, but only minimally. =
This is an=20
excellent chapter on C&H and, based on the statistical =
evidence, the author makes other conclusions that =
lead to=20
particular trading tactics. There are several additional =
criteria=20
that WON would require of a stock forming a C&H and =
then=20
breaking out, such as rising RS, high group RS, underlying =
fundamental characteristics, etc. that are not included in =
the=20
author's study. My own conclusions, anecdotally, are that =
if these=20
other criteria are met AND you get a high volume B/O, the =
odds are=20
in your favor. (No statistical studies to back that up,=20
however!)</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Katherine</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; =
font-color: black"><B>From:</B>=20
<A href=3D"mailto:camelot.homes@charter.net"=20
=
title=3Dcamelot.homes@charter.net>camelot.homes@charter.net</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@xmission.com"=20
title=3Dcanslim@xmission.com>canslim@xmission.com</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Sunday, =
December 09,=20
2001 5:44 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> =
[CANSLIM] low=20
volume breakouts</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>how often does a low =
volume=20
breakout succeed past the pivot point versus =
a high=20
volume breakout past the pivot point?=20
=
david</FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></B=
LOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
- ------=_NextPart_000_004A_01C181BF.C84B4FC0--
- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim". Do not use quotes in your email.
Next Article (by Date): RE: [CANSLIM] breakouts - return to base "John Adair"
Top of Thread: RE: [CANSLIM] breakouts - return to base "John Adair"
Next in Thread: RE: [CANSLIM] breakouts - return to base "John Adair"
Articles sorted by: [Date]
[Author]
[Subject]