Re: [CANSLIM] buying/bear/new bull

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] buying/bear/new bull
Date: Thu, 1 Aug 2002 00:18:51 -0400

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thanks, Ann, nice summary, and worth some thought

- ----- Original Message -----
From: "Ann" <annholly@attbi.com>
To: "CANSLIM Listserv" <canslim@lists.xmission.com>
Sent: Wednesday, July 31, 2002 8:26 PM
Subject: [CANSLIM] buying/bear/new bull

I gleaned the following from Investors Corner, HTMMIS (3rd ed.), notes,
Duke's TV transcription, and various messages sent by the wise and
experienced contributors to this list over the past few weeks/months!

Please correct me if any of the info is wrong. It's also not very well
organized.

********
CANSLIM Buying at the end of Bear Market
7/02

Go beyond Follow Through Day for guarantee of M returning.

Bases may go as low as 40-50% if huge prior advance.

Base may not have handle during beginning of Bull. Stocks may try to stage
breakout from deep within bases. See whether they can break the resistance.
(2/3 of those won't make it, WON says elsewhere)

Flat bases may be especially powerful (refused to go lower in Bear). Also,
base-on-base formations, ascending bases.

Ok if handle is down 20-30%; some handles may form higher than left
rim. But cup and handle should still be proportional.

Bases may be formed below all-time high. Look for healthy, long base.

Look for base patterns which deteriorated the least during the Bear
(abnormal strength in weak market), hold up as well as, or better than
averages.

Buy within 2-3% of pivot point. No pyramiding until the Bull is well
underway.

Beware of faults in bases-wide, loose bases; or bases that are too short.

Odds of success lower if stock breaks out to 52-week high (not all-time
high), but some turnarounds or cyclicals become winners, due to change in M
or fundies. Look for other positive factors. Bases may take years to reach
old highs.

In emerging Bull, stock may gap up on b.o. Can buy, but put less money in
than you usually do, for protection. Only sell if drops below your pivot. If
pulls back on lighter volume, it's ok.

WON (on Kudlow and Cramer): I would be looking for stocks that have 10-12
quarters in a row of earnings up with acceleration in earnings. (Thanks,
Duke.)   Elsewhere, I had written down 5-10 consecutive quarters of
sustained profit growth and accelerating growth rates.

Stocks whose earnings estimates buck the trends.

Ann

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