Re: [CANSLIM] cup-without-handle; "tightness" questions

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions
Date: Tue, 13 Aug 2002 13:52:14 -0500

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Hi jans,

That's my understanding as well. Can't recall if WON uses the term
"churning" at the lows or not, but either way, I've read quite a few
articles that indicate that may very well be a sign that the stock is
refusing to go any lower. It's the clinical opposite of churning at the
highs, were continued activity indicates that there are plenty of sellers to
match any eager new buyers. Another good sign of bottoming is a "tail up",
where you have a large range day around the bottom on high volume, with
price closing near the top of the range. There are plenty of those examples
at the September and July lows. (And by the way, the same "tail down" will
often occur at a top, often times in conjunction with a climax top.)

I think in general, that if you were to get in the habit of taking every
chart and turning it upside down, you'd see the patterns to the upside and
the downside are identical.

Katherine

- ----- Original Message -----
From: <Spencer48@aol.com>
To: <canslim@lists.xmission.com>
Sent: Tuesday, August 13, 2002 9:50 AM
Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions


| Katherine:
|
|      Couldn't "churning" also identify a stock which has been weak (ie. in
a downtrend), but then does not make any more headway down-and does this on
heavy volume.  Wouldn't this indicate the end of the downtrend (or at
least-the beginning of a consolidation, perhaps leading to the stock
garnering strength?).
|
|      Moreover, as distribution (as you pointed out) is likely at the top
(as indicated by the hi volume and stalling); wouldn't accumulation be
likely at the churning point in the downtrend (ie. since the stock is not
falling anymore and it is not doing it on hi volume-wouln't this signify
that someone is buying up all the stock that someone else is selling)
|
|      I bring up this question because I'm not sure of the answer.  I
thought WON has said (or perhaps it was in an IBD Investors Corner article)
that "churning" can take place on the upside (to indicate future weakness)
or on the downside (to indicate future strength).
|
|      In any event, what is your experience or observation or comments and
conclusions on my churning conundrum.
|
|
|                            jans
|
|
| In a message dated Wed, 7 Aug 2002 11:33:26 AM Eastern Standard Time,
kmalm@earthlink.net writes:
|
| > Long story short, churning/stalling is in reference to action *after* a
| > stock or index has been rising, nears its highs, then starts acting odd.
| > That is, large volume is no longer accompanied by significant upward
price
| > movement. In that sense, it is subtle distribution and is a
| > sign that the
| > stock may be topping and/or beginning a consolidating period
|
|
|
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