Re: [CANSLIM] why buy breakouts - article

From: RWElmer@aol.com
Subject: Re: [CANSLIM] why buy breakouts - article
Date: Mon, 22 Apr 2002 19:51:29 EDT

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Greetings all,

I'd like to chime in regarding failed Breakouts. I think it's only natural
for traders to hone in on the opportunity herd mentality presents to them. If
traders are buying in at the lower part of bottoming patterns, in
consolidation ranges, it seems proper for them to sell into the strength that
CANSLIMers create with B/O recognition. No doubt their exits create some of
the downdraft that cause the failures. I have noted that not all B/Os fail
completely, as of late, but that often they're pulling back into the range
then drifting up above the pivot sometimes up to a week after the initial B/O.

The question that's important to contemplate now is, will it be this way from
now on? I suspect that a full blown Bull will again reward buying B/Os
regularly, but that making a living trading in this Market is tough enough so
that the traders are looking for any kind of predictability they can trade
against.

For my part, I believe in the Fundamental aspects of CANSLIM but am inclined
towards buying bottoms. Hence why I seldom contribute here. I have done much
better buying at the bottom of ranges myself, which usually keep me well
within my own 10% mental stop, or more often still positive, when these B/Os
do fail. FWIW.

Good Luck All, no matter how you play it.

Robert W. Elmer

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<HTML>Greetings all,
 
 I'd like to chime in regarding failed Breakouts. I think it's only natural for traders to hone in on the opportunity herd mentality presents to them. If traders are buying in at the lower part of bottoming patterns, in consolidation ranges, it seems proper for them to sell into the strength that CANSLIMers create with B/O recognition. No doubt their exits create some of the downdraft that cause the failures. I have noted that not all B/Os fail completely, as of late, but that often they're pulling back into the range then drifting up above the pivot sometimes up to a week after the initial B/O.
 
 The question that's important to contemplate now is, will it be this way from now on? I suspect that a full blown Bull will again reward buying B/Os regularly, but that making a living trading in this Market is tough enough so that the traders are looking for any kind of predictability they can trade against.
 
 For my part, I believe in the Fundamental aspects of CANSLIM but am inclined towards buying bottoms. Hence why I seldom contribute here. I have done much better buying at the bottom of ranges myself, which usually keep me well within my own 10% mental stop, or more often still positive, when these B/Os do fail. FWIW.
 
 Good Luck All, no matter how you play it.
 
 Robert W. Elmer
 </HTML>

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