Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Low handle
Date: Fri, 5 Apr 2002 16:36:27 -0600
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This is a multi-part message in MIME format. - ------=_NextPart_000_007C_01C1DCC0.0857FC20 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Dave, So much harder when not looking at the actual chart...so just some = general thoughts that came to mind as I was reading your comments: On "W" formations: My understanding is that you are not waiting for a = "handle" on a W. You buy when the stock breaks out on volume above the = little hump in the middle of the "W" formation. On "within 15% of the 52 week high." I don't buy this one as a = filtering/mining technique. WON speaks repeatedly about the exceptions = to these kinds of things when coming out of a deep Bear market. I think = you're far more likely to find good stocks breaking out of sound = bottoming formations these days than breaking out of a consolidation = pattern near a high. That's not to say I don't think sticking with = stocks making new highs is unwise or incorrect, just too limiting given = where stocks are in relationship to action 1 year ago. My general take = on WON's guideline here is that you want to "go with strength." I think = stocks within 15% of their 52 week high are exhibiting strength, but I = don't see it as the *only* way strength can be measured. On industry strength and niche-businesses. Again, I see industry = strength as a guideline to help focus your attention on strength in the = market. There are many ways to measure "strength" in an industry, and = one of the ways to do so is to find strong stocks that are pulling the = industry up with it. If the stock has a unique business model, it may or = may not be lumped into a meaningful industry grouping, and so the = IBD/DGO rankings are essentially useless. If the stock is strong, if the = business is strong, if your due diligence shows that the business has = what it takes to grow and the market is agreeing....who cares about some = arbitrary GRS* number? Katherine *Group Relative Strength, for the newbies. - ----- Original Message -----=20 From: Davellil5@aol.com=20 To: canslim@xmission.com=20 Sent: Friday, April 05, 2002 3:55 PM Subject: [CANSLIM] Low handle A first for me. First time I've run into a good CANSLIM candidate = with a=20 handle 33% below the high point on the left side of the cup or W. And = first=20 time I'm asking for any comments from the group as a whole. The stock in question started a W-formation last August. This March, = it=20 began a handle. The high point of the left wall of the W was around = 60. The=20 pivot of the handle is about 40. The stock just broke out of the = handle on a=20 strong upgap on 80% above average volume. Obviously, the stock is not within WON's rule against buying 15% below = the=20 52-week high. =20 How far below the start of the cup or W can a handle form for a stock = still=20 to be regarded as a timely buy? Is 33% too far -- if a stock really = shines=20 on all other CANSLIM criteria? Incidentally, IBD ranks the stock at 79 99 52 C- A B. The 79 RS = reflects=20 that 33% gap still remaining between start of base formation and = current=20 price level. I discount the=20 C- Industry ranking because the Company is in a niche business. In = this=20 market, I've observed that stocks that rise tend to be of Companies = with=20 niche-manship. They tend to march to their own drummer. They buck = their=20 industry groups. So -- any advice, based on what I've disclosed here? Regards, Dave =20 - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_007C_01C1DCC0.0857FC20 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2600.0" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>Hi Dave,</DIV> <DIV> </DIV> <DIV>So much harder when not looking at the actual chart...so just some = general=20 thoughts that came to mind as I was reading your comments:</DIV> <DIV> </DIV> <DIV>On "W" formations: My understanding is that you are not waiting for = a=20 "handle" on a W. You buy when the stock breaks out on volume above the = little=20 hump in the middle of the "W" formation.</DIV> <DIV> </DIV> <DIV>On "within 15% of the 52 week high." I don't buy this one as a=20 filtering/mining technique. WON speaks repeatedly about the exceptions = to these=20 kinds of things when coming out of a deep Bear market. I think you're = far more=20 likely to find good stocks breaking out of sound bottoming formations = these days=20 than breaking out of a consolidation pattern near a high. That's not to = say I=20 don't think sticking with stocks making new highs is unwise or = incorrect, just=20 too limiting given where stocks are in relationship to action 1 year = ago. My=20 general take on WON's guideline here is that you want to "go with = strength." I=20 think stocks within 15% of their 52 week high are exhibiting strength, = but I=20 don't see it as the *only* way strength can be measured.</DIV> <DIV> </DIV> <DIV>On industry strength and niche-businesses. Again, I see industry = strength=20 as a guideline to help focus your attention on strength in the market. = There are=20 many ways to measure "strength" in an industry, and one of the ways to = do so is=20 to find strong stocks that are pulling the industry up with it. If the = stock has=20 a unique business model, it may or may not be lumped into = a meaningful=20 industry grouping, and so the IBD/DGO rankings are essentially useless. = If the=20 stock is strong, if the business is strong, if your due diligence shows = that the=20 business has what it takes to grow and the market is agreeing....who = cares about=20 some arbitrary GRS* number?</DIV> <DIV> </DIV> <DIV>Katherine</DIV> <DIV> </DIV> <DIV>*Group Relative Strength, for the newbies.</DIV> <DIV> </DIV> <DIV> </DIV> <DIV>----- Original Message ----- </DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3DDavellil5@aol.com=20 href=3D"mailto:Davellil5@aol.com">Davellil5@aol.com</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@xmission.com=20 href=3D"mailto:canslim@xmission.com">canslim@xmission.com</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, April 05, 2002 = 3:55=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Low = handle</DIV> <DIV><BR></DIV>A first for me. First time I've run into a good = CANSLIM=20 candidate with a <BR>handle 33% below the high point on the left side = of the=20 cup or W. And first <BR>time I'm asking for any comments from = the group=20 as a whole.<BR><BR>The stock in question started a W-formation = last=20 August. This March, it <BR>began a handle. The high point of the = left=20 wall of the W was around 60. The <BR>pivot of the handle is = about=20 40. The stock just broke out of the handle on a <BR>strong upgap = on 80%=20 above average volume.<BR><BR>Obviously, the stock is not within WON's = rule=20 against buying 15% below the <BR>52-week high. <BR><BR>How far = below the=20 start of the cup or W can a handle form for a stock still <BR>to be=20 regarded as a timely buy? Is 33% too far -- if a stock = really=20 shines <BR>on all other CANSLIM criteria?<BR><BR>Incidentally, IBD = ranks the=20 stock at 79 99 52 C- A B. The 79 RS reflects <BR>that 33% gap = still=20 remaining between start of base formation and current <BR>price = level. I=20 discount the <BR>C- Industry ranking because the Company is in a niche = business. In this <BR>market, I've observed that stocks that = rise tend=20 to be of Companies with <BR>niche-manship. They tend to march to = their=20 own drummer. They buck their <BR>industry groups.<BR><BR>So -- = any=20 advice, based on what I've disclosed here?<BR><BR>Regards,=20 Dave <BR><BR>-<BR>-To = subscribe/unsubscribe,=20 email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.</BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_007C_01C1DCC0.0857FC20-- - - - -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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