Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] stacking the odds in my favor-buying before the pivot point
Date: Wed, 12 Dec 2001 06:14:50 -0600
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This is a multi-part message in MIME format. - ------=_NextPart_000_039E_01C182D4.4E837440 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi David, I see there hasn't yet been a response to your questions. I was sure = this one would draw some discussion. As I don't know your own level of experience with CANSLIM and investing, = I thought I'd answer this from a more generic point of view. (1) The idea behind waiting for a good stock to form a solid base and = then break out on volume is to identify that magical point at which = Demand outstrips Supply and Price is pushed higher--essentially the old = Supply/Demand curve from economics class. Assuming the lion's share of = sellers have been exhausted and the stock is one that people would wish = to own, the theory is that any additional demand for the stock will push = the price further. In order for the Price to continue on, the underlying = fundamentals that create value in the company have got to be sound. So = from this point of view, waiting for the B/O is stacking the odds in = your favor. (2) The statistics on B/O's from various technical formations can be = measured, but as you notice in our discussion the other day, the studies = we were looking at in Bulkowski's book make no preselection based on = fundamentals, as CANSLIM forces us to do. Even still, there are still = odds that B/O's will fail. It's just the way it is. (3) If you are extremely practiced and confident in CANSLIM candidate = selection and can build a sound argument for the company and its = potential, it is possible to make an early entry. Afterall, *some*body = is buying it on the right side of the cup. Even still, it is less risky = if the entry comes on a major change in trend or at a point that is very = near substantial recent support. I'm not advocating this, I think even = the best of the best get whacked when they try to do this. But more = importantly, I don't believe that anyone who hasn't established a long = running track record of successful selection should do this at all. Just = way too risky. Katherine - ----- Original Message -----=20 From: camelot.homes@charter.net=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, December 11, 2001 6:31 PM Subject: [CANSLIM] stacking the odds in my favor-buying before the = pivot point one thing that might increase ones odds-is buying before the pivot = point is reach, if the stock has hugh volume, great technicals and = fundamentals. what do you all think??? david and also do any of you buy before the pivot point , if the volume is hugh, and the technicals and the fundamentals are excellent, and the stock = is setting up to break out of a nice base pattern??? - ------=_NextPart_000_039E_01C182D4.4E837440 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 http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 5.50.4611.1300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial size=3D2>Hi David,</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>I see there hasn't yet been a response = to your=20 questions. I was sure this one would draw some discussion.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>As I don't know your own level of = experience with=20 CANSLIM and investing, I thought I'd answer this from a more generic = point of=20 view.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>(1) The idea behind waiting for a good = stock to=20 form a solid base and then break out on volume is to identify that = magical point=20 at which Demand outstrips Supply and Price is pushed higher--essentially = the=20 old Supply/Demand curve from economics class. Assuming = the=20 lion's share of sellers have been exhausted and the stock is = one that=20 people would wish to own, the theory is that any additional demand for = the stock=20 will push the price further. In order for the Price to continue on, the=20 underlying fundamentals that create value in the company have got to be = sound.=20 So from this point of view, waiting for the B/O is stacking the odds in = your=20 favor.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>(2) The statistics on B/O's from = various technical=20 formations can be measured, but as you notice in our discussion the = other=20 day, the studies we were looking at in Bulkowski's book make no = preselection=20 based on fundamentals, as CANSLIM forces us to do. Even still, there are = still=20 odds that B/O's will fail. It's just the way it is.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>(3) If you are extremely practiced and = confident in=20 CANSLIM candidate selection and can build a sound argument for the = company and=20 its potential, it is possible to make an early entry. Afterall, = *some*body is=20 buying it on the right side of the cup. Even still, it is less risky if = the=20 entry comes on a major change in trend or at a point that is very near=20 substantial recent support. I'm not advocating this, I think even the = best of=20 the best get whacked when they try to do this. But more importantly, I = don't=20 believe that anyone who hasn't established a long running track record = of=20 successful selection should do this at all. Just way too = risky.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Katherine</FONT></DIV> <DIV> </DIV> <DIV>----- Original Message ----- </DIV> <BLOCKQUOTE dir=3Dltr=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Dcamelot.homes@charter.net=20 = href=3D"mailto:camelot.homes@charter.net">camelot.homes@charter.net</A> = </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, December 11, = 2001 6:31=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] stacking the = odds in=20 my favor-buying before the pivot point</DIV> <DIV><BR></DIV> <DIV><FONT face=3DArial size=3D2>one thing that might increase ones = odds-is buying=20 before the pivot point is reach, if the stock has hugh volume, great=20 technicals and fundamentals. what do you all think??? = david</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>and also</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV>do any of you buy before the pivot point , if the volume is = hugh,<BR>and the technicals and the fundamentals are excellent, and = the stock=20 is<BR>setting up to break out of a nice base=20 pattern???<BR></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_039E_01C182D4.4E837440-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". 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