Re: [CANSLIM] --> CANSLI?

From: Spencer48@aol.com
Subject: Re: [CANSLIM] --> CANSLI?
Date: Tue, 9 Apr 2002 15:16:48 EDT

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Dimitri:

     I don't know if anyone has mentioned this, but today (4/9) IBD in its 
General Markets Page appears pessimistic on the home building sector.  The 
last 2 paragraphs says it all:  After commenting on the nice rises of RYL and 
HOV, the article goes on
 "...It's instructive to monitor the health of the home builders.  They can 
give you clues about the market's underlying strength. But don't blindly 
chase these stocks.  The leaders are far extended from their original 
breakouts.  The weaker stocks have revealed themselves with their subpar 
performance.  Neither makes a good investment candidate now."

     So, along with Katherine's 3 cautions, I'd consider the above as a 
fourth.

jans



In a message dated 4/9/2002 8:59:09 AM Eastern Daylight Time, 
kmalm@earthlink.net writes:

<< At the very least, I'd trail a stop on this one. Action during March 
showed sell signals (distribution and tails down on high volume, large volume 
up days with little progress). Yesterday the stock made a new high on lower 
volume. I'd also be watching for signs that it's started building steam for a 
climax run to the top.
 
 Katherine
   ----- Original Message ----- 
   From: Dimitri Katsaros 
   To: canslim@lists.xmission.com 
   Sent: Tuesday, April 09, 2002 7:43 AM
   Subject: Re: [CANSLIM] --> CANSLI?
 
 
   Any opinions on NVR? It's been doing quite well for me
   and I'd hate to "give back" any gains unneccisarily.
 
   Thanks
   Dimitri
 
   --- Katherine Malm <kmalm@earthlink.net> wrote:
   > Hi John,
   > 
   > Homebuilding is a cyclical business by its nature.
   > While the homebuilders have enjoyed a long boom in
   > this cycle (more recently lengthened by the Fed's
   > easing), its fairly clear that the cycle is nearing
   > its end. That means that most of the homebuilders do
   > not have what it takes to fuel future growth. When
   > looking at any one stock in the group, its important
   > to also check the remaining stocks and see what
   > kinds of earnings and sales they've been printing in
   > the last couple of quarters. Sure enough, most of
   > the homebuilders have seen a marked deceleration in
   > both. Under CANSLIM rules, 2 quarters of
   > decelerating earnings after a long string of
   > accelerating quarters is a sell signal. The next
   > thing you'd want to look at is the technical health
   > of all the players in the group. Pull up a chart of
   > all the players and see what's there. Almost every
   > one of them has formed a head and shoulders topping
   > formation. While HOV and RYL appear to be bucking
   > the trend, investing in them long at this point is
   > the equivalent of playing with fire.
   > 
   > In sum, there are 3 things which qualify
   > homebuilders as "stinky fish":
   > (1) 2 quarters of decelerating earnings
   > (2) cyclical business nearing the end of the cycle,
   > higher interest rates pressuring sales and therefore
   > taking away fuel for future growth
   > (3) group health is poor, most stocks are topping
   > out.
   > 
   > Katherine
  >>

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