Re: [CANSLIM] DFXI

From: Spencer48@aol.com
Subject: Re: [CANSLIM] DFXI
Date: Wed, 3 Apr 2002 14:35:16 EST

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Mike:

     Thanks.  I like the blending of Weinstein's tactics with CANSLIM's C&H.  
I found this on the IBD archives in Ask Bill O'Neil, and these parts might 
prove useful:

"Investor's Corner Archives, High-Volume Rallies Strengthen Base, BY JONAH 
KERI, December 6, 2001
One key step to finding the best and brightest: Hone in on the right side of 
a stock's base. Look for gap-ups and days when the stock jumps on strong 
volume. That tells you fund managers are loading up on shares.   Why does 
that matter? About 80% of a stock's move depends on money managers. Get a few 
institutions behind your stock, and they'll become your best friend.   Once 
you get those accumulation days, your stock must finish strong. Big up days 
on heavy trade shouldn't give way to reversals down on heavy volume. Ideally, 
your stock will digest its big moves with flat or slightly down days on 
lighter volume.   It should then climb to within 5% to 15% of its high before 
settling into a downward-sloping handle. Here, it should act calmly. You 
don't want to see another big-volume gain or gap up until the stock's 
breakout day.     Great stocks often flash multiple days of heavy 
accumulation before breaking out. Lucent gapped up on its heaviest trade in 
months on Jan. 20, 1998, six months into its base. The stock ran into 
resistance at about 90, then broke out Feb. 3 en route to a 250% gain."




In a message dated 4/1/2002 11:00:30 PM Eastern Standard Time, 
mikegibbons@proactech.com writes:

<< 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
  >>

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