Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] CVH
Date: Tue, 20 Aug 2002 11:20:31 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_04A7_01C2483B.98868BE0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Bill, Thought I might use your comment as a chance to clear up a few things on handles. It is most common for handles to form within 5-15% of the left lip of = the cup. In this case, CVH formed within 9.4% of the high of the left of the = cup (34.65). In general, as long as the handle forms properly and falls = within the upper half of the base and other handle characteristics are present, then you have a valid handle. That means that handles can actually form = well below the "normal" 5-15% range. See an annotated chart at: http://WallStreet-LLC.com/canslim/CVH081902.jpg (Sorry, some of my = comments are a bit difficult to read on the chart, but are repeated in = this email.) Just in case you missed my post the other day, here is my summary of = handle characteristics: HANDLES General Requirements: 1. Handles most often begin to form lower than the left side of the = base, generally when the stock has climbed within 5-15% of the high. 2. The midpoint of a good handle should be higher than the midpoint of = the base. 3. The handle should form in the upper half of the base. 4. The handle should form above the 200 day MA, but trade may often lull = below the 50 day MA. 5. The handle should drift sideways or lower. Upward "wedging" handles = are failure prone because the upwardly drifting price doesn't shake out = the weak holders, leaving the stock vulnerable to a correction. Wedging = handles also make pivots harder to spot. WON considers this the most = important aspect of a handle formation. 6. The handle should drift lower on light volume. This shows existing = holders are content to remain invested. 7. Within the handle, volatility should contract. The distance between = price highs and lows (intraday and day to day) should narrow. Avoid = zigzagging or wide and loose handles. Choppy handles carry more = uncertainty. 8. In normal markets, proper handles correct 10-20%. In Bear markets, = they can correct as much as 30%. A handle that drifts <10% is fine as = long as it is drifting downward and meets other requirements. 9. The handle must be at least one week in length but can stretch as = much as 7-10 weeks. It should be smaller in proportion to the size of = the cup. Special Considerations: 1. "High handles" can begin to form at prices higher than the left side = of the base. This is neither ideal nor common, but can still be = successful as long as the other handle requirements are met. 2. Be sure to look at both daily and weekly charts, as stocks with = lengthy bases will have long handles. The lengthy handle may appear as a = base if looking at a daily chart. Long bases signal strong support and = are very strong patterns. (The longer the base, the stronger the = subsequent move.) Based on a study done by the IBD in 96-97, small and = mid cap stocks had 33 week bases on average. Large caps had 66 week = bases on average. 3. A stock can form a handle, near its pivot point and then begin = forming another handle. In this case, consider this to be one long = handle. 4. "No-handle" bases are more error prone, but tend to work at the start = of a fresh rally, especially if the rally is strong. Look for volume to = dry up as the stock comes within 5-10% of its old peak. Stocks breaking = out of bases without a handle are most likely industry leaders; lead the = market in relative price performance, sales and earnings growth; and = have high institutional sponsorship. 5. Double bottom bases can form a handle, though normally they do not do = so.=20 [Note: These notes are compiled from many years worth of Investors' = Corners, HTMMIS, the IBD web site and other misc. sources.] - --Katherine - ----- Original Message ----- From: "Bill Triffet" <btriffet@earthlink.net> To: <canslim@lists.xmission.com> Sent: Tuesday, August 20, 2002 10:49 AM Subject: Re: [CANSLIM] CVH | One more point of interest to me about CVH is the pivot point in = relation to | the high of 34.20 back on 6/18. I realize that coming out of a bear = (if we | indeed are) the pivot point may be lower than the 52 week high. Still, that | seems to me it would make a very possible point of resistance. | Am I just splitting hairs here? | | -Bill | | | ----- Original Message ----- | From: "Katherine Malm" <kmalm@earthlink.net> | To: <canslim@lists.xmission.com> | Sent: Tuesday, August 20, 2002 5:10 AM | Subject: Re: [CANSLIM] CVH | | | > Hi All, | > | > Just to close the loop on yesterday's CVH discussion---see today's weblink | > on CVH: | > | > www.investors.com/weblink | > | > | > Katherine - ------=_NextPart_000_04A7_01C2483B.98868BE0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2716.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY> <DIV>Hi Bill,<BR><BR>Thought I might use your comment as a chance to = clear up a=20 few things on<BR>handles.<BR><BR>It is most common for handles to form = within=20 5-15% of the left lip of the<BR>cup. In this case, CVH formed within = 9.4% of the=20 high of the left of the cup<BR>(34.65). In general, as long as the = handle forms=20 properly and falls within<BR>the upper half of the base and other handle = characteristics are present,<BR>then you have a valid handle. That means = that=20 handles can actually form well<BR>below the "normal" 5-15% = range.<BR><BR>See an=20 annotated chart at:</DIV> <DIV><A=20 href=3D"http://WallStreet-LLC.com/canslim/CVH081902.jpg">http://WallStree= t-LLC.com/canslim/CVH081902.jpg</A> =20 (Sorry, some of my comments are a bit difficult to read on the chart, = but are=20 repeated in this email.)<BR><BR>Just in case you missed my post the = other day,=20 here is my <STRONG><EM><FONT size=3D4>summary of handle=20 characteristics</FONT></EM></STRONG>:</DIV> <DIV> <DIV>HANDLES</DIV> <DIV><EM>General Requirements:</EM></DIV> <DIV>1. Handles most often begin to form lower than the left side of the = base,=20 generally when the stock has climbed within 5-15% of the high.</DIV> <DIV>2. The midpoint of a good handle should be higher than the midpoint = of the=20 base.</DIV> <DIV>3. The handle should form in the upper half of the base.</DIV> <DIV>4. The handle should form above the 200 day MA, but trade may often = lull=20 below the 50 day MA.</DIV> <DIV>5. The handle should drift sideways or lower. Upward "wedging" = handles are=20 failure prone because the upwardly drifting price doesn't shake out the = weak=20 holders, leaving the stock vulnerable to a correction. Wedging handles = also make=20 pivots harder to spot. <EM>WON considers this the most important aspect = of a=20 handle formation.</EM></DIV> <DIV>6. The handle should drift lower on light volume. This shows = existing=20 holders are content to remain invested.</DIV> <DIV>7. Within the handle, volatility should contract. The distance = between=20 price highs and lows (intraday and day to day) should narrow. Avoid = zigzagging=20 or wide and loose handles. Choppy handles carry more uncertainty.</DIV> <DIV>8. In normal markets, proper handles correct 10-20%. In Bear = markets, they=20 can correct as much as 30%. A handle that drifts <10% is fine as long = as it=20 is drifting downward and meets other requirements.</DIV> <DIV>9. The handle must be at least one week in length but can stretch = as much=20 as 7-10 weeks. It should be smaller in proportion to the size of the = cup.</DIV> <DIV> </DIV> <DIV><EM>Special Considerations:</EM></DIV> <DIV>1. "High handles" can begin to form at prices higher than the left = side of=20 the base. This is neither ideal nor common, but can still be successful = as long=20 as the other handle requirements are met.</DIV> <DIV>2. Be sure to look at both daily and weekly charts, as stocks with = lengthy=20 bases will have long handles. The lengthy handle may appear as a base if = looking=20 at a daily chart. Long bases signal strong support and are very strong = patterns.=20 (The longer the base, the stronger the subsequent move.) Based on a = study done=20 by the IBD in 96-97, small and mid cap stocks had 33 week bases on = average.=20 Large caps had 66 week bases on average.</DIV> <DIV>3. A stock can form a handle, near its pivot point and then begin = forming=20 another handle. In this case, consider this to be one long = handle.</DIV> <DIV>4. "No-handle" bases are more error prone, but tend to work at the = start of=20 a fresh rally, especially if the rally is strong. Look for volume to dry = up as=20 the stock comes within 5-10% of its old peak. Stocks breaking out of = bases=20 without a handle are most likely industry leaders; lead the market in = relative=20 price performance, sales and earnings growth; and have high = institutional=20 sponsorship.</DIV> <DIV>5. Double bottom bases can form a handle, though normally they do = not do=20 so. </DIV> <DIV> </DIV> <DIV>[Note: These notes are compiled from many years worth of Investors' = Corners, HTMMIS, the IBD web site and other misc. sources.]</DIV> <DIV> </DIV> <DIV>--Katherine</DIV><BR><BR>----- Original Message -----<BR>From: = "Bill=20 Triffet" <<A=20 href=3D"mailto:btriffet@earthlink.net">btriffet@earthlink.net</A>><BR>= To:=20 <<A=20 href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= ><BR>Sent:=20 Tuesday, August 20, 2002 10:49 AM<BR>Subject: Re: [CANSLIM] = CVH<BR><BR><BR>| One=20 more point of interest to me about CVH is the pivot point in = relation<BR>to<BR>|=20 the high of 34.20 back on 6/18. I realize that coming out of a bear (if = we<BR>|=20 indeed are) the pivot point may be lower than the 52 week high.=20 Still,<BR>that<BR>| seems to me it would make a very possible point of=20 resistance.<BR>| Am I just splitting hairs here?<BR>|<BR>| = - -Bill<BR>|<BR>|<BR>|=20 - ----- Original Message -----<BR>| From: "Katherine Malm" <<A=20 href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>><BR>| To: = <<A=20 href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= ><BR>|=20 Sent: Tuesday, August 20, 2002 5:10 AM<BR>| Subject: Re: [CANSLIM]=20 CVH<BR>|<BR>|<BR>| > Hi All,<BR>| ><BR>| > Just to close the = loop on=20 yesterday's CVH discussion---see today's<BR>weblink<BR>| > on = CVH:<BR>|=20 ><BR>| > <A=20 href=3D"http://www.investors.com/weblink">www.investors.com/weblink</A><B= R>|=20 ><BR>| ><BR>| > Katherine<BR><BR></DIV></BODY></HTML> - ------=_NextPart_000_04A7_01C2483B.98868BE0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". 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