Go to Jeff Salisbury LWGate Home Page.From: "Bill Triffet" <btriffet@earthlink.net>
Subject: Re: [CANSLIM] XRAY and CECO
Date: Tue, 13 Aug 2002 10:17:16 -0700
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Hear hear! Thanks Katherine - for the excellent links! - -Bill - ----- Original Message ----- From: "Mike Gibbons" <mike@proactech.com> To: <canslim@lists.xmission.com> Sent: Tuesday, August 13, 2002 10:09 AM Subject: RE: [CANSLIM] XRAY and CECO > Lesson for list members: if you really want to learn a subject in depth, pick a fight with Katherine. You will be treated gently, > but come away from the experience greatly enlightened. I recommend all the chart reading neophytes on the list check out all the > links Katherine provided. > > Thank you Katherine for the hand drawn chart and uploading all those references. I hope you weren't up all night (I see the time on > the posting was 5:19 am) on my account. As someone else asked recently, do you ever sleep? > > Aloha, > > Mike Gibbons > Proactive Technologies, LLC > http://www.proactech.com > -----Original Message----- > From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm > Sent: Tuesday, August 13, 2002 5:19 AM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] XRAY and CECO > > > HI Mike, > > > > I can tell my response wasn't clear. Let me try again with some examples and articles. > > > > In general, it's important to distinguish between a "healthy rising stock" and a "base." On one hand, you will have a stock, like > CECO, which has been rising over time. Each time is rises for a while, then it pauses to consolidate. That pause is the "base." Each > time the stock reaches a new high and then consolidates, it will demonstrate its ability to absorb the gains from the previous rise > of >=25%. That pattern that you see along the rising trend line is what you want to see in a stock. The problem is, after the stock > has done this 3 or 4 times, it becomes well-known and obvious, and so it is rare that it can continue tracing out this same rising > behavior for too much longer. What will normally happen is that the stock will often fail in the next breakout and/or correct so > deeply that it undercuts the low of the previous base. That "resets the base count" and you then start over with counting bases, > assuming of course, that the stock *can* recover. WON suggests that if the correction is more than 80% that the stock is too badly > damaged that it may not recover in any reasonable time period. (IBM and WMT come to mind....look back at a 10 year chart of each of > them and notice what happened after they corrected so deeply. They essentially went into years of sideways movement.) > > > > Sometimes a picture is worth a thousand words, so thought it easier to write up some notes. See notes on the "Healthy Rising > Stock" at: > > http://WallStreet-LLC.com/canslim/HealthyRisingStock.JPG > > > > Now, far different than the healthy rising stock is the *type* of base that it forms while consolidating. There are many, though > there are some that are more common, more reliable, and far easier to spot than others. I'd rank the ascending base as the most > difficult to master. See my handwritten notes on types of bases at: > > http://WallStreet-LLC.com/canslim/TypesOfBases.JPG > > > > Just to be complete, I've also uploaded quite a few resources related to both rising stocks (base counting) and ascending bases. I > figured it was far easier to do that than to reinvent the wheel and describe the ascending base in detail. See them at: > > > > Counting bases: > > http://WallStreet-LLC.com/canslim/CountingBasesHowTo.doc > > http://WallStreet-LLC.com/canslim/DeepCorrResetBCount.JPG > > http://WallStreet-LLC.com/canslim/CountBasesB4Buy.JPG > > http://WallStreet-LLC.com/canslim/MktWashoutNewBases.JPG > > > > Ascending bases: > > http://WallStreet-LLC.com/canslim/AscendingBaseRally.JPG > > http://WallStreet-LLC.com/canslim/FindAscendingBases.doc > > http://WallStreet-LLC.com/canslim/BuyPointABase.doc > > > > In summary, there is no such thing as a "long term ascending base" as the concept confuses a healthy rising stock pattern over a > longer time period with the ascending base pattern, which is a particular kind of consolidation (>=6wks). > > > > CECO has been exhibiting the characteristics of a "healthy rising stock" and is currently forming a 3rd stage base. CECO is *not* > currently forming an ascending base. It is forming a very strange base on base (flat + C&H) as far as I can tell. I saw many odd > patterns like this at the September '01 low and many of the stocks were able to recover from the V shaped sell off, breakout and > move on. Many of the retailers, the gaming stocks, homebuilders, security related stocks and Aero & Defense come to mind. > > > > Katherine > > > > > > ----- Original Message ----- > From: Mike Gibbons > To: canslim@lists.xmission.com > Sent: Monday, August 12, 2002 10:20 PM > Subject: RE: [CANSLIM] XRAY and CECO > > > Hi Katherine, > > I just opened my brand new copy of HTMMIS v 3 and found on P. 137-138 the topic "Ascending Base". The definition is somewhat > similar to what you describe:- "Ascending Bases, like flat bases, occur midway along a move up after a stock has broken out of a > cup-with-handle or double-bottom base. It has three pullbacks from 10% to 20% with each low point during the sell-of in price being > higher than the preceding, which is why I call it and ascending base. Each of the pullbacks usually ocurs due to the general market > declining at that time." > > Looking at your annotated chart, it would seem CECO fits this definition. It would also seem that the most recent pullback > coincided with the July selloff in the markets in agreement with the definition. > > Maybe CECO is one to watch. Any other views? > > Aloha, > > Mike Gibbons > Proactive Technologies, LLC > http://www.proactech.com > -----Original Message----- > From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm > Sent: Monday, August 12, 2002 3:52 PM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] XRAY and CECO > > > HI Mike, > > I've noticed the term "long term ascending base" coming up in many posts lately, so thought I'd make comment on that concept. > > There's actually no such thing, as "ascending base" is a very particular kind of conolidation in the stock's move. In general, > a stock will rise, then pause (base), rise, then pause, rise, then pause, and so on. As long as the rise between consolidations is > at least 25%, the next area of consolidation is considered a new stage base. This is also the same reason that an LLUR is not a > base....it's a stock on the rise, though with low volatility. (Sorry, Tom, just a point on which we don't agree.) > > The base normally happens when the stock makes a new high, then falls and/or refuses to continue the up move for some period > of time. A flat base for example, moves essentially sideways for at least 5 wks, the C&H or cup without handle lasts for at least 7 > wks and sports a deeper correction as the stock retraces some of the previous move, etc. The ascending base is just an odd > consolidation in that it drifts upward, attempting to breakout 3 times. It's a subtle pattern that's hard to read, but shouldn't be > confused with a stock that is rising *between* consolidations. > > I've uploaded an example on the CECO chart that shows the base, move up, base, move up, etc. > http://WallStreet-LLC.com/canslim/CECO081202.jpg > > Please note that I marked the chart quickly, so the circled areas for the base are "general" and not exact for each base > formation. > > Katherine > ----- Original Message ----- > From: Mike Gibbons > To: canslim@lists.xmission.com > Sent: Monday, August 12, 2002 7:54 PM > Subject: [CANSLIM] XRAY and CECO > > > When I brought up XRAY last week, Winston observed that the longer term pattern was more like an ascending base. To my > surprize, the XRAY breakout hasn't failed yet, although it hasn't been strong either, and may be in the process of forming another > handle. > > I came across another stock today with similar chart characteristics to XRAY - now in the handle of a Cwh formation with > good CANSLIM characteristics (http://www.cwhcharts.com/canslim/fuzzy_canslim.php?symbol=CECO) except for v. high institutional > ownership - but the longer term pattern looks like an ascending base. > > The CwH pattern is not ideal with the cup too short and V-shaped, which I attribute to the market behavior in July, but > perhaps its on its way to resuming the long term ascending base pattern. > > Comments anyone? > > Aloha, > > Mike Gibbons > Proactive Technologies, LLC > http://www.proactech.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.
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