Go to Jeff Salisbury LWGate Home Page.From: Andreas Himmelreich <judgejimmy@web.de>
Subject: AW: AW: [CANSLIM] Industry group movements.
Date: Tue, 19 Feb 2002 17:37:25 +0100
Next Article (by Author): [CANSLIM] Market Andreas Himmelreich
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Hi Gary, I made the experience that the Ratings by Won do not help a lot to spot=20 uptrending IGs, I think it works better if one charts IGs. As far as I can see the ranking do not correlate in a way that makes = sense=20 to me, I just do not look at the rankings at all, they confuse me (maybe = I=20 am just to stupid, but I simply gave up on them). I use RS (Relative Strength) on IGs. On the long side I like IGs that break out from a base price and = relative=20 strength that crosses over to the 60 - 70 Range, that means I consider a = long trade, if the RS of the Group is at least 60. But I would also=20 consider it if its well below this, depending on the price spike. A recent Example long on ARG: http://WallStreet-LLC.com/pub/BullmarketforBuilders.zip/IGchemicals.zip http://WallStreet-LLC.com/pub/BullmarketforBuilders.zip/ARG.zip What I really like about the IG Chart is the divergence between RS and=20 Price Action in the IG. See how the price goes down today on the IG but = RS=20 just spikes today as well. That's what you want to see. On the first day = the market turns this Group will be likely to break out further. Now the Stock --> good chart for a stop loss on 17.65, fundamentals are = not=20 that great, but its the best Chart out of the group and the second best=20 fundamentals, and a low beta. Another possibility --> Buy more then one stock out of the group or buy = the=20 whole group through and extraded index fund, which comes close (seldom = the=20 case). Before go into a IG Speculation I check also with http://groups.yahoo.com/group/HeadsUpModule/files/sector.txt and http://groups.yahoo.com/group/ChasRichards/files/universe.txt to find correlation's between the sell and buy signals of Charles Richards and the Industry Group I want to buy or sell. Once again, I do believe there are dependent and market independent IGs, = so=20 I skip this rule of Canslim, though I am much more cautious during=20 downtrends called by Won. Right now I would not buy ARG. Then I especially make sure I do not own stocks with high Beta (above = 1.25)=20 and no tech stuff at all no matter how the IG is doing, sooner or later it will break down. After the breakout of the underlying = stock I take profits quickly (as I did with Room). Lets say we would be still in the market of November, December (last = year)=20 - -> Operationally I would do the following --> I check the 195 IG Group Charts every day (only in good markets, I have a macro that flipps through them really fast) flag them with buys = and the date of the buy rating (buy is only a breakout, not a ongoing=20 pattern). Then I run a wide canslim screen (EPS > 70 RS > 70 ACC Diss ABC, SMR ABC = and some vector vest criteria) which also contains the criteria Buy=20 DateToday() and look for stocks that allow a tight stop loss (best is a=20 recent flag, great also cup with handle or even right site of a handle). And from there I decide what to buy (kind of trying to ride wave by = wave). Wow, long email, sorry, but I was in a writing trip. Hope it makes = sense. Regards Andreas > -----Urspr=FCngliche Nachricht----- > Von: Gary A. Snyder [SMTP:gas175k@hotmail.com] > Gesendet am: Tuesday, February 19, 2002 3:56 PM > An: canslim@lists.xmission.com > Betreff: Re: AW: [CANSLIM] Industry group movements. > > > > Andreas: > How does one find the RS and price of industrial groups? Are you = saying > industrial groups rated or passing into the top 60 or 75% of all the=20 groups? > In other words groups ranked at least 50 to 79 in the 197 rankings? or = RS=20 of > 90 or above is that in the top 10% of the ratings? gas175 > >From: Andreas Himmelreich <judgejimmy@web.de> > >Reply-To: canslim@lists.xmission.com > >To: "'canslim@lists.xmission.com'" <canslim@lists.xmission.com> > >Subject: AW: [CANSLIM] Industry group movements. > >Date: Sun, 17 Feb 2002 16:13:18 +0100 > > > >Hi, > > > >Once again a quote from = http://beta.dailygraphs.com/tutorials/b04a.asp=20 - --> > > > >"Here's a case where herd mentality works to your advantage. Studies=20 show > >37% of a stock's move is directly tied to the performance of the=20 industry > >the stock is in. Another 12% is due to strength in its overall = sector." > > > >I put a file to http://WallStreet-LLC.com/pub/IGfiles.zip, which = shows=20 the > >correlation in an example. I found hundreds of them and still find = them > >every day. Basically you can take the chart patterns and apply them = to > >industry groups and you will find very strong and dependable trends=20 where > >false breakouts take place, but much less then with individual = stocks. > > > >Here and example on the short side: > > > >http://WallStreet-LLC.com/pub/IGShortexample.zip > > > >Here an example for an IG that sets up a bull market for its members: > > > >http://WallStreet-LLC.com/pub/BullmarketforBuilders.zip > > > >Important is: Price and RS need to make new highs (lows for shorting) = our > >of a base for a buy signal. For the long side I like IGs that cross = RS=20 of > >60 to 70. > >On the short side crossing RS of 30. > > > >But it can be also very profitable to get into trends that are well > >established, e.g. where the RS is above 90, but then be sure that you = wait > >for a second price and RS base and a second Breakout to get in and be = rigid > >if the group shows sell signals. > > > >Best Regards > > > >Andreas > > > > > > > > > > > >And this is perfectly canslim, because Oneil states that if you go = with=20 a > >breakout, look if other stocks out of the group have or had a = breakout=20 as > >well ... > > > > > > > > > > > > > > > -----Urspr=FCngliche Nachricht----- > > > Von: Gary A. Snyder [SMTP:gas175k@hotmail.com] > > > Gesendet am: Sunday, February 17, 2002 2:30 PM > > > An: canslim@lists.xmission.com > > > Betreff: [CANSLIM] Industry group movements. > > > > > > > > > > > > > > > > > > I am fascinated by industry group movement but can't figure out = what > >move > > > groups up and down. For example: EPIQ is for sure a fine = investment=20 and > >I > > > have owned it but the last big move it made from about 13 to 25 = the > >industry > > > group moved from at least the lower B group to 30-32. If the = industry > >group > > > had not moved EPIQ would still be building a base. In the same = group > >BARZ > > > went from 35 to 55, ADVS 29 to 51, FIC 39 to 63, BSYS 44 to 63. = Even > >thought > > > these companies offer completely different software to the = financial > > > industry. A few months ago IBD used GNSS, a semi manufacture, as = an > >example > > > of a successful cup and handle but failed the mention that the=20 industry > > > group started up from a e rating and worked its way up to at least = the > >mid b > > > rating, against WON rule look in the top sixty groups. Not just=20 GNSS, > >all > > > the semi manufacturing stocks were going up even if they were over > >bought > >by > > > as much as 50%. You may think that you are picking good companies = and =0D > >you > > > are but they are not going anywhere until the industrial group is=20 going > >up. > > > So what moves these industry groups? Some are easy to figure: = defense > > > stocks- government spending to increase dramatically per purposed > >budget. > > > Safety and security- the terrorist effect. Any computer group a = month > >ago- I > > > don't have a clue. You don't want to know how poorly some of these > >security > > > companies were rated when they started moving up and they are not > > > fundamentally good companies but that doesn't matter if the market > >perceives > > > future growth. Some of these security companies have very poor > >fundamentals > > > but that does not stop them from going through the roof if the=20 industry > > > group is on the rise. The rating on some of these companies look=20 great > > > now(after the fact). Lower oil prices helped the success of > > > transportation/trucking even in a bad economy but if the price of = oil > >goes > > > up for any of a number of reasons, number one being Iraq targeted = as=20 the > > > next enemy on the war on terrorism transportation/trucking will go = down > >so > > > fast only bested by oil&gas/any company with proved oil reserves=20 going > >up. > > > You don't have to pick the best company in the group. Throw a dart = at =0D > >any > > > company on the list for success. Home builders: low interest = rates, > > > increased new home sales, increased building permits but let the > >interest > > > rates go up a little and home builders start correcting along with = home > > > mortgage businesses and banks living on refinancing income. In = fact=20 let > >an > > > influential analysis say interest rates have bottomed and all = these > >groups > > > start down no proof needed.Good companies along with bad. I'm=20 confused > >and > > > bloodied but feel one key is tracking industry groups. I ask for=20 comment > > > and/or instruction. gas175k > > > > > > > > > > > > _________________________________________________________________ > > > MSN Photos is the easiest way to share and print your photos: > > > http://photos.msn.com/support/worldwide.aspx > > > > > > > > > - > > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > > -In the email body, write "subscribe canslim" or > > > -"unsubscribe canslim". Do not use quotes in your email. > > > >- > >-To subscribe/unsubscribe, email "majordomo@xmission.com" > >-In the email body, write "subscribe canslim" or > >-"unsubscribe canslim". Do not use quotes in your email. > > > > > > > _________________________________________________________________ > MSN Photos is the easiest way to share and print your photos: > http://photos.msn.com/support/worldwide.aspx > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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