Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] chart reading
Date: Wed, 17 Jul 2002 23:17:40 -0400
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zilla, a couple points. first, for every seller (or buyer), there must be a buyer (or seller). Mixed into this simplistic equality equation are the short sellers, day traders, institutional money managers (including but not limited to mutual fund mgrs), and the market makers / floor specialists (who are required to trade to "stabilize" the market even if it means adding to inventory, or selling short). second, throughout the formation of a cup, there will be buyers and sellers present, and for different reasons as the cup progresses. On the left rim of the cup, many investors (other than CANSLIMers) would not buy because they are uncomfortable buying at new highs (they want value, so want it to go lower after a high). A CANSLIMer might not be buying there, however, since there may not be any base formed. If a CANSLIMer following the rules were to buy there, then they would stop out on an 8% stop loss as the left side of the cup is built. Along the bottom, you might find the despairing investor selling, thinking the end of the world, or at least the stock market, is nigh upon us. And you might also find value shoppers (bottom fishers) seeing a base forming and beginning to buy. As the right side of the cup is built, those that bot at the bottom of the cup, and are focused on short term trading, might become the sellers, and the buyers might be as you describe. For those stalwart "left rim" buyers that are still around by the time the handle begins to form, many will finally bail out saying "well, I least I broke even, even if I lost the use of my money for xxx months" as they see no more price appreciation, or even mild declines in price. Once again, CANSLIMers following the rules will not yet be buyers, rather waiting for a proper breakout. There may be a few like me that try to sneak in a partial position while it is still basing in the handle. It is also in the handle, just like in the bottom of the cup, where you may be able to recognize that institutional money has drawn the proverbial line in the sand, and said, "no lower". And if you get a classic handle, you will also see the volume drying up sharply as remaining motivated sellers begin to disappear. - ----- Original Message ----- From: "zillagirl" <zillagirl@email.msn.com> To: <canslim@lists.xmission.com> Sent: Wednesday, July 17, 2002 12:50 PM Subject: Re: [CANSLIM] chart reading My understanding is in the cup with handle-people bought into the stock somewhere in the left side of the cup-followed it down to the bottom-rode it back up to (or near the) top of the right side of the cup. As it reaches the top of the right side a whole new set of buyers are looking and saying"wow, this stock is really climbing,numbers are looking good, I'm jumping in. "Mostly canslim buyers (haha). At this same time the people who held on through the whole process of the cup are saying "I finally made my losses back-I'm jumping out now before I possible go through that again." The people jumping out cause a small dip in the price(the left side of the handle), when this is complete the buyers take over and form the right side of the handle-the breakout(hopefully)and the and the spiraling climb up from there(peace on earth). I hope this helps and I'm sure if I'm wrong we'll find out soon. zilla - ----- Original Message ----- From: "Kelly Short" <kelly.short@neoris.com> To: <canslim@lists.xmission.com> Sent: Wednesday, July 17, 2002 6:55 AM Subject: RE: [CANSLIM] chart reading Tom (and group), Thanks for the link. I'm still a bit fuzzy on the difference between a CH formation and a Doublebottom formation. I took two of the charts from the link you provided and on the CH formation overlaid (in red line) a Doublebottom formation. Is the formation a CH because the second dip does not go below the first? Or is there some other method of identifying a doublebottom formation? Kelly - -----Original Message----- From: Tom Worley [mailto:stkguru@bellsouth.net] Sent: Wednesday, July 17, 2002 6:32 AM To: CANSLIM Subject: [CANSLIM] chart reading nice, quick refresher http://www.amateur-investors.com/Chart_Patterns_Article.htm only one I caught was FSTW Tom Worley stkguru@bellsouth.net AIM: TexWorley - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ____________________________________________________________________________ For your protection, this e-mail message has been scanned for viruses. Visit us at http://www.neoris.com/ - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -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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