RE: [CANSLIM] DFXI

From: "Mike Gibbons" <mikegibbons@proactech.com>
Subject: RE: [CANSLIM] DFXI
Date: Mon, 1 Apr 2002 18:02:07 -1000

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jans,

In reference to your question about volume in the right side of the cup, we
screen for volume above the 50 day moving average as a stock forms the right
side of the cup in the belief that this is an indication of institutional
buying. We also look for volume drying-up in the handle indicating that the
sellers have left the stage. We combine these two features numerically into
an indicator that we use to measure the quality of our cwh charts and rank
them accordingly.

Because DFXI did not have this kind of constructive price/volume action, it
has not made it onto our lists since January. You can read more about our
approach at http://www.cwhcharts.com/methodologyFrame.htm

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 Spencer48@aol.com
Sent: Sunday, March 31, 2002 11:37 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] DFXI


Ian:

     I just want to mention this for what it's worth:  A promo market letter
(it wants me to subscribe. It's called the Erlanger Squeeze Play, published
by Michael London) has as its strategy to buy stocks with powerful looking
charts THAT also have a high short interest.  His belief is that a stock
that
is poised to rise will have a double impetus if it also has a high short
interest (since when it does rise, the shorts will  buy back).

     This strategem makes sense to me.  So, at least in my universe, the
high
short interest is a plus (considering that the chart also looks strong).
However,  you make a point that I hadn't considered:  On DFXI's rise (from
its nadir to the right lip) the volume was sub-50 day moving average.  Now,
I
don''t believe WON has said anything definite about the volume on the rise
to
the right lip.  Is it your experience that a rise to the right lip should be
accompanied by rising volume?  If there is not concommitant high volume up
the right side of the cup, then do you believe that MOST C&H's are likely to
fail-even after it breaks-out-when volume up the right side (until you reach
the handle) is lowish?

     Does anyone else have experience concerning volume on the right side of
the cup?

jans

In a message dated 3/31/2002 12:32:11 AM Eastern Standard Time,
ianstm@shaw.ca writes:

<< Today, the upward, low-volume slope from 28 to 36, and the large short
position, would combine to make me very wary. But then again, my long
checkered history of being wary with DFXI has always been wrong in the past
..

 Cheers,

 Ian >>

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