RE: [CANSLIM] DFXI vs. JEC--Faulty handle?

From: "Mike Gibbons" <webmaster@cwhcharts.com>
Subject: RE: [CANSLIM] DFXI vs. JEC--Faulty handle?
Date: Fri, 25 Jan 2002 16:04:30 -1000
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> Is a cup's depth supposed to be no deeper than 35%??

Following up on my earlier post, with the example of an O'Neil cwh chart, I
suppose my example of JBHT could be critiqued as the cup depth was 50% and
maybe that's what provoked Dan's question. However, as the issue was more
about the action in the DFXI handle, I was presenting JBHT as an example of
text-book handle action rather than the entire cwh pattern.

Aloha,

Mike Gibbons
Proactive Technologies, LLC
http://www.proactech.com


- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Dan Forant
Sent: Friday, January 25, 2002 3:06 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] DFXI vs. JEC--Faulty handle?


Is a cup's depth supposed to be no deeper than 35%??

DanF

- ----- Original Message -----
From: "Mike Gibbons" <mikegibbons@proactech.com>
To: <canslim@lists.xmission.com>
Sent: Friday, January 25, 2002 1:25 PM
Subject: RE: [CANSLIM] DFXI vs. JEC--Faulty handle?


> I was a little critical of DFXI's handle when Dave brought it to our
> attention on 1/8, but appropriately contrite when it surged the following
> day.
>
> For an example of a more classic cwh chart, have a look at JBHT. This
stock
> has shown 4 stages now of advancing on high volume and then pulling back
on
> reducing volume before surging again. It may be forming another cup
> yesterday and today. (yesterday's reversal was a bit disconcerting but
there
> is a subtlety in this kind of a reversal that diminishes its significance:
> If you think of yesterday and the breakout day before as one long day,
i.e.
> put the two days atop each other, then the stock closed in the top third
of
> its (2-day)range on massive volume.  That is positive.  And all of
> yesterday's volume was above the prior high.  That was also positive.  So
> although technically yesterday was a reversal, it was not a sell signal.
>
> We had this on our "low" handle list (based on Weinstein) when it formed
> it's first cup in November and it reappeared on our lists at each
subsequent
> cup formation. The fundamentals were never sufficiently strong to make it
a
> CANSLIM stock but as an example of a cup and handle, I think it's a good
> one. I'm pleased to be holding it for a nice gain.
>
> Aloha,
>
> Mike Gibbons
>
>
> -----Original Message-----
> From: owner-canslim@lists.xmission.com
> [mailto:owner-canslim@lists.xmission.com]On Behalf Of Spencer48@aol.com
> Sent: Friday, January 25, 2002 7:56 AM
> To: canslim@lists.xmission.com
> Subject: Re: [CANSLIM] DFXI vs. JEC--Faulty handle?
>
>
> Katherine:
>
>      To me DFXI does not look even like a nice Cup (much less a cup with a
> zig/zag handle.  However, I realize analyzing is all in perspective (like
> beauty, it's in the eye of the beholder, I guess).  Anyway, there was an
on
> point (at least I think so) article today in IBD.  You might find it
useful.
> It concerns wide and loose bases:
>
> "Investor's Corner
> Friday, January 25, 2002
>
> Base Can Be Tight And Loose
> BY MONIKA TJIA
>
> INVESTOR'S BUSINESS DAILY
>
>
> Stocks form a variety of bases. Whether the base is a cup-with-handle or a
> double-bottom, in most cases you'll find at least a week or two of wild
> price
> action.
>
> That's OK. After all, investors' emotions fuel stock movements. Fear
drives
> prices sharply down, and greed yanks them back up.
>
> But if you see this erratic buying and selling throughout the base, watch
> out. An excessive number of dizzying price swings indicates institutions
are
> moving in and out with ease. For every eager buyer, count an anxious
seller.
>
> An occasional shakeout is fine. But you want a base to also have at least
> several weeks of tight, quiet price action. This indicates solid support
> throughout a base.
>
> Tight action means small price gaps from a stock's weekly high to its
weekly
> low. Often you'll see a stock close the week virtually unchanged for
several
> weeks in a row. This implies a lack of speculators and a load of steady
> long-term shareholders.
>
> >From its October 1998 low to its April 16, 1999, high, Techne (TECH) ran
up
> 150%. At its April peak (see point 1 in accompanying image), the
> fast-growing
> maker of cytokine test kits used to find new drugs formed a new base,
> correcting 24% from its high.
>
> As Techne formed its cup-with-handle base, it moved up and down in tiny
> steps. At the end of each week in May, the stock finished very close to
its
> prior weekly close (point 2).
>
> In the week ended May 21, the stock swung as much as 12%. But it had a
> positive reversal. For the week, it finished up 0.13 point vs. the prior
> week
> (point 3). This price action is exactly what you want to see, because
> institutions raced in to support the stock.
>
> As Techne etched the right side of its base, the weekly spreads grew
wider.
> But weeks of quiet action far outnumbered its weeks of wild price swings.
>
> On Aug. 25, 1999, Techne broke out of its 19-week base on triple average
> trade (point 4).
>
> After breaking out, Techne moved sideways for a few weeks. It held above
its
> 50-day moving average. When the market finally took off in late October,
so
> did Techne.
>
> >From its breakout to its July 2000 peak, Techne gained 416%. It then
began
> to
> carve a new three-month base. But in terms of complexion, this one was the
> exact opposite of its previous base.
>
> Instead of making slight price moves, it made extreme ones virtually every
> week. The price swings ranged as much as 26%. Techne failed to finish its
> base. It's now 56% off its all-time high."
>
> jans
>
>
>
> In a message dated 1/25/2002 9:30:10 AM Eastern Standard Time,
> kmalm@earthlink.net writes:
>
> << Hi stockoper8or,
>
>  When I wrote my note mid-day, DFXI had a tail. Looks like it ended
midrange
> after dropping a bit more after my note. Interesting action. I suspect in
a
> stronger market it would have been up and out of here by now. I wonder if
> the
> zig zag handle that started it all was a sign of market iffiness or a sign
> of
> stock iffiness. Just one for the "I wonder" pile of thoughts!
>   >>
>
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