Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Wedging example: CECO
Date: Sun, 8 Sep 2002 09:52:16 -0500
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Hi Tom,
If you take a look at the CECO chart, you can see that those lows are =
"drifting up" in the handle on declining volume, which is the "wedge" =
that we've been talking about. Even though the highs overall in the =
handle essentially drift sideways, that still makes it a sloppy handle. =
That drifting up means that you're not really having a shakeout, which =
is what a downward drifting handle on low volume would typically =
indicate. If there's no shakeout, then any moves higher out of the =
handle are going to be iffy because the weak hands that didn't throw in =
the towel in the wedging handle will do so as the stock tries to make =
new highs.
To me, a handle that drifts down on declining volume is an indication =
there are fewer and fewer people "playing" the stock. As it's always =
easier for a ball to roll downhill, you would expect that any small =
amount of selling (low volume is the key) would tend to make the price =
"drift" or "roll" down along the lows. Because there's no heavy sell =
presure, the drift is benign.
Katherine
- ----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Sunday, September 08, 2002 8:31 AM
Subject: Re: [CANSLIM] Wedging example: CECO
Katherine, don't know about you or others but this answer makes little =
sense to me. Granted, I personally prefer a handle that goes sideways, =
and tightens up the daily trading range (e.g. highs stay the same, lows =
get closer to the highs). But I thought the whole idea of the handle is =
volume declining because the sellers are disappearing. If sellers are =
diminishing, then seems logical that the lows would not be as low over =
time (e.g. less selling pressure).
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Sunday, September 08, 2002 9:20 AM
Subject: Re: [CANSLIM] Wedging example: CECO
May as well add this to the reply, from today's "Ask Bill" Column:
=20
Question: What determines whether a handle is sloping up or =
down, the highs or lows of the handle? =20
- Submitted from Chicago, Ill. =20
Answer: Ideally, the handle should drift downward along both =
its high and lows points. If the lows drift downward while the highs are =
basically flat, that's not necessarily a bad thing, although it's =
something to treat cautiously. If the lows drift downward but the highs =
drift up, this could indicate looseness in the handle, which is not =
constructive action. These are just general observations about how a =
handle should look like. The most important thing to avoid is a handle =
that consistently drifts upward along its price lows. These patterns =
have a much higher probability of failing when the stock breaks out.=20
=20
----- Original Message -----=20
From: "Katherine Malm" <kmalm@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Thursday, September 05, 2002 9:37 AM
Subject: Re: [CANSLIM] Wedging example: CECO
| Hi Kelly,
|=20
| For the most part, the action on the right side of CECO's "V" cup =
was
| wedging, just as you noted. You had to pick the toughest chart in =
the
| *universe* though.... Prior to that sudden V-cup, the basing action =
was
| actually constructive. Since then, it's pretty much a nightmare of =
activity
| and very difficult to read. The first area you marked as a pivot is =
iffy for
| 2 reasons. First, the base, having been so deep, has to be at least =
6 weeks
| in length to be valid. That means the earliest a valid pivot could =
form
| would be about 8/2. You can see the action there is a little =
suspect,
| forming a sloppy handle at best. In the handle itself, you actually =
want to
| see volume dry up, but the problem is that this stock took a big =
plunge at
| the start of the handle. One could certainly argue that the handle =
"moved
| sideways" but I'd be disinclined to do so because of the wedging =
action to
| get there. That, combined with a very low volume breakout attempt =
on 8/15
| just seals the deal...this stock didn't want to go *anywhere.* I'll =
bet the
| strong action in the group has had more to do with it's ability to =
hang in
| there than anything else. I wouldn't, as a result look at the high =
8/16 as a
| "pivot" but instead a pull back into the base. The only thing that =
can save
| CECO at this point is a nice tight sideways consolidation on quiet =
volume.
| If it can do that, then I'd say it's ready to move on. If it stays =
wide and
| loose as it's been, then hasta la vista baby.
|=20
| Katherine
| ----- Original Message -----
| From: "Kelly Short" <kshort@kellyrshort.com>
| To: <canslim@lists.xmission.com>
| Sent: Wednesday, September 04, 2002 8:34 PM
| Subject: [CANSLIM] Wedging example: CECO
|=20
|=20
| | Katherine,
| |
| | To continue your point on wedging- would this stock be an example =
of
| wedging
| | action?
| |
| | http://www.kellyrshort.com/canslim/CECOwedgeexample.gif
| |
| | Kelly
| |
| | -
| | -To subscribe/unsubscribe, email "majordomo@xmission.com"
| | -In the email body, write "subscribe canslim" or
| | -"unsubscribe canslim". Do not use quotes in your email.
|=20
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<DIV>Hi Tom,</DIV>
<DIV> </DIV>
<DIV>If you take a look at the CECO chart, you can see that those lows =
are=20
"drifting up" in the handle on declining volume, which is the "wedge" =
that we've=20
been talking about. Even though the highs overall in the handle =
essentially=20
drift sideways, that still makes it a sloppy handle. That drifting up =
means that=20
you're not really having a shakeout, which is what a downward drifting =
handle on=20
low volume would typically indicate. If there's no shakeout, then any =
moves=20
higher out of the handle are going to be iffy because the weak hands =
that didn't=20
throw in the towel in the wedging handle will do so as the stock tries =
to make=20
new highs.</DIV>
<DIV> </DIV>
<DIV>To me, a handle that drifts down on declining volume is an =
indication=20
there are fewer and fewer people "playing" the stock. As it's always =
easier for=20
a ball to roll downhill, you would expect that any small amount of =
selling (low=20
volume is the key) would tend to make the price "drift" or "roll" down =
along the=20
lows. Because there's no heavy sell presure, the drift is benign.</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dstkguru@bellsouth.net =
href=3D"mailto:stkguru@bellsouth.net">Tom=20
Worley</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Sunday, September 08, =
2002 8:31=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Wedging =
example:=20
CECO</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial>Katherine, don't know about you or others but =
this=20
answer makes little sense to me. Granted, I personally prefer a handle =
that=20
goes sideways, and tightens up the daily trading range (e.g. highs =
stay the=20
same, lows get closer to the highs). But I thought the whole =
idea of the=20
handle is volume declining because the sellers are disappearing. If =
sellers=20
are diminishing, then seems logical that the lows would not be as low =
over=20
time (e.g. less selling pressure).</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine Malm</A>=20
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV><B>Sent:</B> Sunday, September 08, 2002 9:20 AM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] Wedging example: CECO</DIV></DIV>
<DIV><BR></DIV>
<DIV>May as well add this to the reply, from today's "Ask Bill" =
Column:</DIV>
<DIV> </DIV>
<DIV>
<TABLE cellSpacing=3D0 cellPadding=3D0 width=3D"80%" border=3D0>
<TBODY>
<TR>
<TD vAlign=3Dtop colSpan=3D2></TD><!--<td align=3D"center" =
rowspan=3D"3" class=3D"txtsubxsml"><font size=3D"1">
<a href=3D"../about/WJO.asp"><img src=3D"../images/staWJO2.gif" =
width=3D"59" height=3D"85" border=3D"0" alt=3D"William J. O'Neil"><br>
<u>William J. O'Neil</u></a><br>
<nobr>Chairman & Founder<br>
Investor's Business Daily</nobr></font></td>--></TR>
<TR>
<TD class=3Dcopy vAlign=3Dtop> Question: What determines =
whether a=20
handle is sloping up or down, the highs or lows of the handle? =
</TD>
<TD> </TD></TR>
<TR>
<TD class=3Dcopy vAlign=3Dbottom =
align=3Dright>- Submitted from=20
Chicago, Ill. </TD>
<TD> </TD></TR>
<TR>
<TD class=3Dcopy vAlign=3Dtop colSpan=3D2>
<DIV><BR>
<SCRIPT language=3DJavaScript>
<!--
OAS_AD('www.investors.com/AskBill250', 'x17');
//-->
</SCRIPT>
<SCRIPT language=3DJavaScript1.1=20
=
src=3D"http://oascentral.investors.com/RealMedia/ads/adstream_jx.ads/www.=
investors.com/AskBill250/1619235933@x17?_RM_HTML_TARGET_=3D_blank"></SCRI=
PT>
Answer: <A=20
=
href=3D"http://oascentral.investors.com/RealMedia/ads/click_lx.ads/www.in=
vestors.com/AskBill250/680603479/x17/Investors/BCN2002060020_Fisher_Sep25=
0_AB/Fisher_SqMod_S2.gif/63376165306635393364366532633030"=20
target=3D_blank></A>Ideally, the handle should drift downward =
along both=20
its high and lows points. If the lows drift downward while the =
highs are=20
basically flat, that's not necessarily a bad thing, although =
it's=20
something to treat cautiously. If the lows drift downward but =
the highs=20
drift up, this could indicate looseness in the handle, which is =
not=20
constructive action. These are just general observations about =
how a=20
handle should look like. The most important thing to avoid is a =
handle=20
that consistently drifts upward along its price lows. These =
patterns=20
have a much higher probability of failing when the stock breaks =
out.=20
</DIV>
<DIV> </DIV>
<DIV> </DIV></TD></TR></TBODY></TABLE></DIV>
<DIV>----- Original Message -----=20
<DIV>From: "Katherine Malm" <<A=20
href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>></DIV>
<DIV>To: <<A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
></DIV>
<DIV>Sent: Thursday, September 05, 2002 9:37 AM</DIV>
<DIV>Subject: Re: [CANSLIM] Wedging example: CECO</DIV></DIV>
<DIV><BR></DIV>| Hi Kelly,<BR>| <BR>| For the most part, the action on =
the=20
right side of CECO's "V" cup was<BR>| wedging, just as you noted. You =
had to=20
pick the toughest chart in the<BR>| *universe* though.... Prior to =
that sudden=20
V-cup, the basing action was<BR>| actually constructive. Since then, =
it's=20
pretty much a nightmare of activity<BR>| and very difficult to read. =
The first=20
area you marked as a pivot is iffy for<BR>| 2 reasons. First, the =
base, having=20
been so deep, has to be at least 6 weeks<BR>| in length to be valid. =
That=20
means the earliest a valid pivot could form<BR>| would be about 8/2. =
You can=20
see the action there is a little suspect,<BR>| forming a sloppy handle =
at=20
best. In the handle itself, you actually want to<BR>| see volume dry =
up, but=20
the problem is that this stock took a big plunge at<BR>| the start of =
the=20
handle. One could certainly argue that the handle "moved<BR>| =
sideways" but=20
I'd be disinclined to do so because of the wedging action to<BR>| get=20
there. That, combined with a very low volume breakout attempt on =
8/15<BR>| just seals the deal...this stock didn't want to go =
*anywhere.* I'll=20
bet the<BR>| strong action in the group has had more to do with it's =
ability=20
to hang in<BR>| there than anything else. I wouldn't, as a result look =
at the=20
high 8/16 as a<BR>| "pivot" but instead a pull back into the base. The =
only=20
thing that can save<BR>| CECO at this point is a nice tight sideways=20
consolidation on quiet volume.<BR>| If it can do that, then I'd say =
it's ready=20
to move on. If it stays wide and<BR>| loose as it's been, then hasta =
la vista=20
baby.<BR>| <BR>| Katherine<BR>| ----- Original Message -----<BR>| =
From: "Kelly=20
Short" <<A=20
=
href=3D"mailto:kshort@kellyrshort.com">kshort@kellyrshort.com</A>><BR>=
| To:=20
<<A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
><BR>|=20
Sent: Wednesday, September 04, 2002 8:34 PM<BR>| Subject: [CANSLIM] =
Wedging=20
example: CECO<BR>| <BR>| <BR>| | Katherine,<BR>| |<BR>| | To continue =
your=20
point on wedging- would this stock be an example of<BR>| wedging<BR>| =
|=20
action?<BR>| |<BR>| | <A=20
=
href=3D"http://www.kellyrshort.com/canslim/CECOwedgeexample.gif">http://w=
ww.kellyrshort.com/canslim/CECOwedgeexample.gif</A><BR>|=20
|<BR>| | Kelly<BR>| |<BR>| | -<BR>| | -To subscribe/unsubscribe, email =
"<A=20
=
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>| =
| -In=20
the email body, write "subscribe canslim" or<BR>| | -"unsubscribe=20
canslim". Do not use quotes in your email.<BR>|=20
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