Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] IBD Article on IGT
Date: Tue, 24 Sep 2002 08:41:01 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_22B3_01C263A6.1C5971A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Chris, In a C&H or saucer & handle base, the pivot point is not defined by the = left side of the cup, rather the "pause" that it puts in as it climbs = the right side of the base. That pause (pivot point) that begins forming = the handle has particular guidelines, among them, that it should form in = the upper half of the base and preferably (though not necessarily) = within 15% of the left lip of the cup. That means that the pivot will = more often form *below* the old high set at the left side of the cup. As = long as the handle and base are valid, then the "break out of the base" = occurs as the stock clears that pivot point, not the left side of the = cup. I'm not sure of the IBD article you're referring to, so I've marked = up a chart of IGT so that you can see what I see when looking at the = chart. See an annotated chart at: http://WallStreet-LLC.com/canslim/IGT092302.jpg While technically IGT formed a C&H base and broke out, the base itself = has 2 yellow flags. First, the handle, meets the minimum 5 days to be = valid, but it is relatively short in comparison to the length of the = base itself. This is not an absolute requirement, but a proportionate = handle allows more time to shake out weak holders before a breakout. = Second, the base lacks good symmetry, meaning that the number of = accumulation weeks (5) is less than the number of distribution weeks = (7). While that is a "preferred" criteria of a base and not an absolute, = it more than likely explains why IGT pulled back after the breakout and = violated the pivot set on 8/22. So far, so good, as it hasn't fallen on = big volume and fallen below the pivot for any length of time, but I'll = bet it spends some time bouncing around in this range before it decides = which way it wants to go from here. Watch BYD, MBG, STN, PENN, ALLY and = ISLE for clues as to the direction. Gaming and homebuilding have been = two industries that have continued to work during the Bear. I'd suspect = that money could easily flow out of these groups for a couple of = reasons--First, if money were to continue to flow out of the market = net-net, then it makes sense that people would take profits from these = areas in order to monetize their gain as they switch to alternative = investments. Second, if the Market does begin to work again and creates = a favorable backdrop for growth stocks, then money designated for growth = would flow from these areas to industries that are showing strengthening = and/or new growth patterns. Katherine ----- Original Message -----=20 From: Chris Mc=20 To: canslim@lists.xmission.com=20 Sent: Sunday, September 22, 2002 4:09 PM Subject: [CANSLIM] IBD Article on IGT Hello to All. Can someone take a look at IGT's chart. Just trying to interpret = article in IBD on 9/11 re: IGT "clearing a base started in late = December" and "bursting out of an 8 l/2 month base" - "volume finishing = 50% above its 50 day average" to close at $68.32... In order to CLEAR a base, wouldn't price have to exceed $71.95 which = was high on 12/27/01? =20 Thanks to all Chris Mc - ------=_NextPart_000_22B3_01C263A6.1C5971A0 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 6.00.2719.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>Hi Chris,</DIV> <DIV> </DIV> <DIV>In a C&H or saucer & handle base, the pivot point is not = defined by=20 the left side of the cup, rather the "pause" that it puts in as it = climbs the=20 right side of the base. That pause (pivot point) that begins = forming the=20 handle has particular guidelines, among them, that it should form in the = upper=20 half of the base and preferably (though not necessarily) within 15% of = the left=20 lip of the cup. That means that the pivot will more often form *below* = the old=20 high set at the left side of the cup. As long as the handle and base are = valid,=20 then the "break out of the base" occurs as the stock clears that pivot = point,=20 not the left side of the cup. I'm not sure of the IBD article you're = referring=20 to, so I've marked up a chart of IGT so that you can see what I see when = looking=20 at the chart. See an annotated chart at:</DIV> <DIV> <DIV> </DIV> <DIV><A=20 href=3D"http://WallStreet-LLC.com/canslim/IGT092302.jpg">http://WallStree= t-LLC.com/canslim/IGT092302.jpg</A></DIV></DIV> <DIV> </DIV> <DIV>While technically IGT formed a C&H base and broke out, the base = itself=20 has 2 yellow flags. First, the handle, meets the minimum 5 days to = be=20 valid, but it is relatively short in comparison to the length of the = base=20 itself. This is not an absolute requirement, but a proportionate handle = allows=20 more time to shake out weak holders before a breakout. Second, the base = lacks=20 good symmetry, meaning that the number of accumulation weeks (5) is = less=20 than the number of distribution weeks (7). While that is a "preferred" = criteria=20 of a base and not an absolute, it more than likely explains why IGT = pulled back=20 after the breakout and violated the pivot set on 8/22. So far, so good, = as it=20 hasn't fallen on big volume and fallen below the pivot for any length of = time,=20 but I'll bet it spends some time bouncing around in this range before it = decides=20 which way it wants to go from here. Watch BYD, MBG, STN, PENN, ALLY and = ISLE for=20 clues as to the direction. Gaming and homebuilding have been two = industries that=20 have continued to work during the Bear. I'd suspect that money could = easily flow=20 out of these groups for a couple of reasons--First, if money were = to=20 continue to flow out of the market net-net, then it makes sense that = people=20 would take profits from these areas in order to monetize their gain as = they=20 switch to alternative investments. Second, if the Market does begin to = work=20 again and creates a favorable backdrop for growth stocks, then money = designated=20 for growth would flow from these areas to industries that are showing=20 strengthening and/or new growth patterns.</DIV> <DIV><A = href=3D"http://WallStreet-LLC.com/canslim/IGT092302.jpg"></A> </DIV>= <DIV>Katherine</DIV> <BLOCKQUOTE dir=3Dltr=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Dmcjass@charter.net href=3D"mailto:mcjass@charter.net">Chris = Mc</A>=20 </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 22, = 2002 4:09=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] IBD Article = on=20 IGT</DIV> <DIV><BR></DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Hello to = All.</FONT></DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Can someone take a = look at IGT's=20 chart. Just trying to interpret article in IBD on 9/11 re: IGT = "clearing=20 a base started in late December" and "bursting out of an 8 l/2 month = base" -=20 "volume finishing 50% above its 50 day average" to close at=20 $68.32...</FONT></DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>In order to CLEAR a = base,=20 wouldn't price have to exceed $71.95 which was high on=20 12/27/01? </FONT></DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Thanks to = all</FONT></DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV> <DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Chris=20 Mc</FONT></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_22B3_01C263A6.1C5971A0-- - - - -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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