Re: [CANSLIM] COLM

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] COLM
Date: Wed, 11 Sep 2002 19:22:28 -0500

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Hi Kent,

Re: "What we don't see is how many shares bought at some price have really
| been sold at a loss, thus decreasing actual overhead supply.
|
| It would be nice to see how many shares still exist at each buy point
| in the past. Even better to see the shares that are inclined to sell on
| the way up and those that would hold on for the long run."

Short of reading people's minds, I'm not sure how that would be possible!

What we *do* know is the amount of activity at different price points and
thus, the probability that it will create problems down the road. The only
way to gauge that is to:

(1) Know how long ago shares exchanged hands at higher prices. The longer
ago it was, the less likely people will be itching to get out at those
prices. See http://WallStreet-LLC.com/canslim/COLM091102.jpg
(2) The pattern of activity at different price points. The more selling
activity at a price point, the greater the likelihood that this is a zone of
resistance. http://WallStreet-LLC.com/canslim/COLM0911023yrs.jpg
(3) The current activity leading up to the breakout area. The U/D volume is
a clue. While the stock is in the base, the higher the U/D volume, the
greater the likelihood that buying is overcoming selling pressure as the
stock nears its breakout.
http://WallStreet-LLC.com/canslim/COLM091102CwH.jpg

Katherine

- ----- Original Message -----
From: "Kent Norman" <kent_norman@yahoo.com>
To: <canslim@lists.xmission.com>
Sent: Wednesday, September 11, 2002 5:52 PM
Subject: Re: [CANSLIM] COLM


| Please set me straight if the following is in error:
|
| (Assuming a downward price pattern )
|
| The problem with a price and volume is that it only shows how many
| shares traded at a certain price.
|
| When vol decreases, we interpret it as selling pressure diminishing.
| Looking at the old prices, we assume there is overhead supply waiting
| to bail out if the price ever gets near break even (could be a faulty
| assumption).
|
| What we don't see is how many shares bought at some price have really
| been sold at a loss, thus decreasing actual overhead supply.
|
| It would be nice to see how many shares still exist at each buy point
| in the past. Even better to see the shares that are inclined to sell on
| the way up and those that would hold on for the long run.
|
| Regards
| Kent Norman
|
| --- Patrick Wahl <pjwahl@attbi.com> wrote:
| > Its still valid though, isn't it?  The idea of overhead supply is
| > that all those people
| > who bought at old highs are just sitting there ready to get out at
| > break even if the
| > price ever gets back there, I would think that is still the situation
| > after a year,
| > although as time passes I suppose there is some share turnover as
| > people just give
| > up.  If this seems incorrect, let me know why.
| >
| > On 11 Sep 2002 at 12:55, Jack Tencza wrote:
| >
| > > Patrick, Why the overhead supply comment when it
| > > hasn't been that high since 7/01? Thanks, Jack
| >
| >
| >
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