Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Home Depot
Date: Tue, 20 Aug 2002 13:09:41 -0500
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Hi Hermann, HD certainly doesn't pass the requisite technical tests to be considered a current CANSLIM candidate, but I see it as important in several ways: HD is one of the 500 pound gorillas of retailing and at one time carried far more CANSLIM characteristics than it does now. While it may not be exhibiting current technical strength, it is still important as a sentiment indicator. First, if it were to form a bottom here, it *may* indicate that institutions are once more willing to load up on the stock of a very good company which has been refocusing its strategy recently and expanding into new market niches such as government contracting. Second, if the market reacts well to good news and the price rises without taking a big jump on the news and then selling off, that may well indicate a change in tone in the market. That is, stocks go *up* on good news. Add that to more cases where stocks stop going down so severely on bad news and it could indicate a turning point in the market. Third, consumers as a whole have been willing to spend throughout the recessionary period. If they are feeling confident about their current and future prospects, they will parlay that confidence into spending at good retailers and on other consumer discretionary products. That by itself doesn't create macroeconomic "safety" but it sure helps. Just to test the waters, I created a list of stocks from various industries that I consider to be "consumer discretionary." Stocks don't make it to the list unless they are minimum $6/30000 ADV. In all, that's 300 stocks. Of the 300, 141 have forward growth rates >=15%, HD included. That's what I considered to be the bare bones minimum for a "growth" stock. There's also nothing to say that current growth rates have not been reduced too far, as forecasters always seem to severely underforecast in periods like this in the same manner that they tend to severely overforecast in bubble times. Of the 141, only 40 stocks currently pass what I consider to be "minimum technicals." (RS>=60, price no more than 15% below the 50 day SMA, and price at or above the 200 day SMA). This is an interesting list of 40 stocks, by the way. Take a look and see if you see any CANSLIM themes running through the list of 40. See the complete list of 300 at: http://WallStreet-LLC.com/canslim/ConsumerOverview.xls. You can filter any of the columns to narrow the list as I suggested in the last paragraph. Katherine - ----- Original Message ----- From: "Hermann Ertl" <hertl@attglobal.net> To: <canslim@lists.xmission.com> Sent: Tuesday, August 20, 2002 11:05 AM Subject: Re: [CANSLIM] Home Depot | > From: "Tom Worley" <stkguru@bellsouth.net> | > Date: Tue, 20 Aug 2002 08:14:05 -0400 | > | > HD reported this morning, like Lowe's showing excellent growth with earnings | > up 28% (3 cents ahead of forecasts) and sales up 12%. Shouldn't be a | > surprise, given all the new home owners, but Lowe's is being credited with | > yesterday's rally in part. Let's see if HD can take care of Tuesday. | | | At what stage in its chart patterns is HD? | | | | - | -To subscribe/unsubscribe, email "majordomo@xmission.com" | -In the email body, write "subscribe canslim" or | -"unsubscribe canslim". Do not use quotes in your email. - - - -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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