Re: [CANSLIM] light volume days

From: Spencer48@aol.com
Subject: Re: [CANSLIM] light volume days
Date: Wed, 26 Dec 2001 13:57:54 EST

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Top of Thread: [CANSLIM] light volume days Kent Norman
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Kent:

     During the interim between Christmas and New Years many of the 
big-buying stock-pickers employed by the institutions are on a winter-holiday 
vacation.  Therefore, that is the reason why volume is relatively light.  So 
even if a stock goes up, that just means retailers (individual stock buyers) 
like the stock.  Since WON puts so much emphasis on the big-buying 
institutions, my belief is not to put too much credence in stocks breaking 
out-even if its BO is on highish volume.  

     The reason is that I believe if the institutional stock pickers don't 
like the stock (and they already own it), they'll sell it when they 
return-and if they start selling, since institutions have so much buying 
power, the selling will pack a punch.  And even if they do like the stock, 
they may short it (unless they have a large position in it already, and then 
they may very well "sell" to garner profits, and until the stock comes back 
to a more reasonable pre-holiday level-probably just above the point where it 
broke out from.  And from that point, if they do like the stock's prospects, 
they may very well buy it.  It's then, after New Year's, that volume surge on 
breakout is significant, I believe.)

     My strategy would be to wait until after New Year's.  See, then, if the 
stock drops, but not to below its break-out point.  It would also be nice if 
the stock stabilized at just above the BO point on low volume.  (I'd also 
wait until I was sure that the market has become bullish, not merely that it 
was giving signals of becomming bullish, or giving signals that it is 
sheparding the bear into its hibernation enclave.)

jans


In a message dated 12/26/2001 12:48:46 PM Eastern Standard Time, 
kent_norman@yahoo.com writes:

<< How should we interpret holiday related light volume
 days?
 Normally low volume indicates a lack of conviction.
 Does anyone have a way to adjust for seasonal
 influence?
 
 Thanks
 Kent Norman >>

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