Go to Jeff Salisbury LWGate Home Page.From: Spencer48@aol.com
Subject: [CANSLIM] LLUR vs. Late Stage Base
Date: Fri, 12 Jul 2002 14:56:33 EDT
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Tom:
I often had troubles in identifying LLUR's and distinguishing them from
WON's late-stage bases. While LLUR's look bullish and strong (and I've read
often that "the trend is your friend"), I wasn't able to understand the
difference between them and late stage bases-since they are both ascending
bases (with LLURs being bullish and late-stage bases being bearish [according
to WON's analysis]). To me, however, both were like an indecipherable Elliot
Wave in that invariably: One can always identify the wave AFTER the fact.
So I wrote Ask WON (in investors.com) and here is his answer:
"My question is: how do you distinguish between an ascending base and a
late stage base-they both rise from about 3 bases. Cincinnati, OH (AskWon
answered it 7/8/02)
WON's Answer: The difference lies in the shape of the bases. In a
late-stage base, the stock might have already run up anywhere from as much as
100% to 400%-500% or more. The bases it made along the way had a minimum
correction of 20%, assuming they were all cup bases. But in an ascending
base, there are three pullbacks from 10% to 20% each, and the low point
during each sell-off is higher than the previous. Since the pullbacks were
smaller than in a normal cup base, you can count this as one long base
structure. These bases occur when a stock has much power but is held back by
a sideways-moving market. Always keep in mind that ascending bases are rare.
Also remember that if a stock breaks out of a base, but then corrects so far
down that it undercuts the bottom of its base, you can then reset the base
count."
jans
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