Go to Jeff Salisbury LWGate Home Page.From: "Chris Mc" <mcjass@charter.net>
Subject: Re: [CANSLIM] IBD Article on IGT
Date: Tue, 24 Sep 2002 09:48:00 -0700
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OOPS - I meant "Left side of CUP"
Chris Mc
----- Original Message -----=20
From: Chris Mc=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, September 24, 2002 9:41 AM
Subject: Re: [CANSLIM] IBD Article on IGT
Thank you Katherine. I guess it would be TOO easy if the pivot was =
the left side of the base. Analyzing these charts do take some time!! =20
Chris Mc
P.S. Your diagrams of "A Heathly Rising Stock" and "Base Patterns" =
are extremely helpful.
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, September 24, 2002 6:41 AM
Subject: Re: [CANSLIM] IBD Article on IGT
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
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<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>OOPS - I meant "Left =
side of=20
CUP"</FONT></DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Chris Mc</FONT></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> Tuesday, September 24, =
2002 9:41=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] IBD =
Article on=20
IGT</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Thank you =
Katherine. I=20
guess it would be TOO easy if the pivot was the left side of the =
base. =20
Analyzing these charts do take some time!! </FONT></DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>Chris Mc</FONT></DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Lucida Sans Unicode" size=3D2>P.S. Your =
diagrams of "A=20
Heathly Rising Stock" and "Base Patterns" are extremely =
helpful.</FONT></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=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</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>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, September 24, =
2002 6:41=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] IBD =
Article on=20
IGT</DIV>
<DIV><BR></DIV>
<DIV>Hi Chris,</DIV>
<DIV> </DIV>
<DIV>In a C&H or saucer & handle base, the pivot point is =
not=20
defined by the left side of the cup, rather the "pause" that it puts =
in as=20
it climbs the right side of the base. That pause (pivot =
point) that=20
begins forming the handle has particular guidelines, among them, =
that it=20
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=20
pivot will more often form *below* the old high set at the left side =
of the=20
cup. As long as the handle and base are valid, then the "break out =
of the=20
base" occurs as the stock clears that pivot point, not the left side =
of the=20
cup. I'm not sure of the IBD article you're referring to, so I've =
marked up=20
a chart of IGT so that you can see what I see when looking at the =
chart. See=20
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=20
itself has 2 yellow flags. First, the handle, meets the minimum =
5 days=20
to be valid, but it is relatively short in comparison to the length =
of the=20
base itself. This is not an absolute requirement, but a =
proportionate handle=20
allows more time to shake out weak holders before a breakout. =
Second, the=20
base lacks good symmetry, meaning that the number of accumulation =
weeks=20
(5) is less than the number of distribution weeks (7). While =
that is a=20
"preferred" criteria of a base and not an absolute, it more than =
likely=20
explains why IGT pulled back after the breakout and violated the =
pivot set=20
on 8/22. So far, so good, as it hasn't fallen on big volume and =
fallen below=20
the pivot for any length of time, but I'll bet it spends some time =
bouncing=20
around in this range before it decides which way it wants to go from =
here.=20
Watch BYD, MBG, STN, PENN, ALLY and ISLE for clues as to the =
direction.=20
Gaming and homebuilding have been two industries that have continued =
to work=20
during the Bear. I'd suspect that money could easily flow out of=20
these groups for a couple of reasons--First, if money were to =
continue=20
to flow out of the market net-net, then it makes sense that people =
would=20
take profits from these areas in order to monetize their gain as =
they switch=20
to alternative investments. Second, if the Market does begin to work =
again=20
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=20
=
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=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</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=20
IGT's chart. Just trying to interpret article in IBD on 9/11 =
re: IGT=20
"clearing a base started in late December" and "bursting out of an =
8 l/2=20
month base" - "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></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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