Re: [CANSLIM] Low handle

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Low handle
Date: Fri, 5 Apr 2002 23:22:27 -0500

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Katherine's response already cleared the air on a "W" (double bottom)
formation. But one of the "Ask Bill" columns in the past six months or so
ago was posted here, and clearly endorsed buying stocks that were even 50%
below their high, so long as there was an appropriate basing formation,
including a c&h formation) and other required CS elements present.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: <Davellil5@aol.com>
To: <canslim@xmission.com>
Sent: Friday, April 05, 2002 4:55 PM
Subject: [CANSLIM] Low handle


A first for me.  First time I've run into a good CANSLIM candidate with a
handle 33% below the high point on the left side of the cup or W.  And first
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
began a handle.  The high point of the left wall of the W was around 60.
The
pivot of the handle is about 40.  The stock just broke out of the handle on
a
strong upgap on 80% above average volume.

Obviously, the stock is not within WON's rule against buying 15% below the
52-week high.

How far below the start of the cup or W can a handle form for a stock still
to be regarded  as a timely buy?  Is 33% too far -- if a stock really shines
on all other CANSLIM criteria?

Incidentally, IBD ranks the stock at 79 99 52 C- A B.  The 79 RS reflects
that 33% gap still remaining between start of base formation and current
price level.  I discount the
C- Industry ranking because the Company is in a niche business.  In this
market, I've observed that stocks that rise tend to be of Companies with
niche-manship.  They tend to march to their own drummer.  They buck their
industry groups.

So -- any advice, based on what I've disclosed here?

Regards, Dave

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