[CANSLIM] DCOM - B/O rules

From: <vchang@win-invest.com>
Subject: [CANSLIM] DCOM - B/O rules
Date: Wed, 31 Jul 2002 01:18:05 +0100

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MessageOn Wedsday's edition (today) IBD listed DCOM as b/o from a double
bottom.  On Tuesday IBD weblink said " ... Dime hit 25.94 Monday, just
missing a breakout..." .

As a newbie trying to learn more about charts and breakouts, this seems like
a great example to check my understanding.

If I am getting it right, the reason why DCOM is deemed to have b/o is
because of the following two easons:

a) It closed at 26.90 having achieved an high of 27.0, and that is above the
previous high of 26.80 back in May 17, 2002.

b) The new high was achieved at a volume 1,056,800 which is 378% up from the
day before and four times the average daily volume of 221,100

What is the exact rule for a breakout mathematically? (Lets say that I were
to program it in say Metastock?)

Base on this case I can see two rules at least (in pseudo-code):

IF today's high is greater than the previous high (is this the all time high
or just the rolling 52 week high?)
AND
IF today's volume is greater than N times the normal volume (is this some
sort of moving average of the daily volume, or just yeaterday's volume)
THEN yippe it is a B/O

Is  there any "fuzziness" to the above rules?

BTW, the fundamentals on DCOM also look great, ignoring M for a moment, is
this a valid CANSLIM candidate stock?

Rgds

Victor Chang



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Next Article (by Author): Re: [CANSLIM] Moving Averages "Donald Wallker"
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