[CANSLIM] "Don't let A Shakeout Scare You"

From: "Mike Gibbons" <mike@proactech.com>
Subject: [CANSLIM] "Don't let A Shakeout Scare You"
Date: Thu, 1 Aug 2002 22:56:05 -1000

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Out here in Hawaii, I don't get IBD until 2 pm and its usually late in the
evening before I get around to reading it, so I apologize for bringing up
yesterdays news, but this Investor's Corner article (08/01/02) really has me
puzzled.

What lesson are we supposed to learn from it? Discussing TOO in 1999, they
say it wasn't an ideal base because it lacked a handle. Then that the
breakout lacked sufficient volume. From the graph in the paper, it looks as
though the pivot was at about $19. Following that Greenspan threatened
raising interest rates and the stock closed lower three days in a row on
significantly above average volume, closing at its low for the day on the
third day at about $15.25, or about 20% below the pivot (remember there's a
sell rule at 8% below the buy price above the pivot) . Although my
understanding of CANSLIM and its application is still in its infancy, I'd be
surprized if any CANLIMmer was still in the stock at that point, and yet
they seem to be saying that one should have hung on through the shakeout for
a gain on the 4th day of 29%. However , they don't say how analysis of the
chart would have led one to stay invested.

I'm looking for enlightenment, can someone explain what I'm missing here?

Aloha,
Mike Gibbons
http://www.proactech.com

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<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial size=3D2>Out =
here in Hawaii,=20
I don't get IBD until 2 pm and its usually late in the evening before I =
get=20
around to reading it, so I apologize for bringing up yesterdays news,=20
but&nbsp;this Investor's Corner article (08/01/02) really has me=20
puzzled.</FONT></SPAN></DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial=20
size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial size=3D2>What =
lesson are we=20
supposed to learn from it? Discussing TOO in 1999, they say it wasn't an =
ideal=20
base because it lacked a handle. Then that the breakout lacked =
sufficient=20
volume. From the graph in the paper, it looks as though the pivot was at =
about=20
$19. Following that Greenspan threatened raising interest rates and the =
stock=20
closed lower three days in a row on significantly above average volume, =
closing=20
at its low for the day on the third day at about $15.25, or about 20% =
below the=20
pivot (remember there's a sell rule at 8% below the buy price above the=20
pivot)&nbsp;. Although my understanding of CANSLIM and its application =
is still=20
in its infancy, I'd be surprized if any CANLIMmer was still in the stock =
at that=20
point, and yet they seem to be saying that one should have hung on =
through the=20
shakeout for a gain on the 4th day of 29%. However , they don't say how =
analysis=20
of the chart would have led one to stay invested.</FONT></SPAN></DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial=20
size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial size=3D2>I'm =
looking for=20
enlightenment, can someone explain what I'm missing =
here?</FONT></SPAN></DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial=20
size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial=20
size=3D2>Aloha,</FONT></SPAN></DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial size=3D2>Mike=20
Gibbons</FONT></SPAN></DIV>
<DIV><SPAN class=3D360571608-02082002><FONT face=3DArial size=3D2><A=20
href=3D"http://www.proactech.com">http://www.proactech.com</A></FONT></SP=
AN></DIV></BODY></HTML>

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