RE: help with pivots: was Re: [CANSLIM] Worley's Weekend Weeview

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: help with pivots: was Re: [CANSLIM] Worley's Weekend Weeview
Date: Thu, 19 Dec 2002 15:42:32 -0600

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Hi jans,

Though the stock reversed shortly after the breakout, I did not state that
it had failed, only that it had reversed after the breakout (a reversal tail
on 12/18). It is still holding above the pivot and I think it would be
constructive to see it pause here and consolidate given that reversal,
especially if it did so on  low volume. It could very well pull back far
enough that it forms a fresh handle, however. There's just no way to know.

There are only 3.2m shares in the float, so I think it's going to be tough
for any of the major institutions to put on positions of size without
secondaries or insider selling. You are right that I misstated the trend in
ownership and thanks for catching that. I was looking at the shares sold on
the MSN site instead of the net shares for the quarter---that's a whopping
+77,000 shares net increase in institutional ownership for the quarter!

I agree that CEDC has much going for it fundamentally and for that reason
probably warrants a spot on a watchlist. While it is essentially a defensive
stock, it does have many growth characteristics worth noting. Either way, my
radar says "caution" on this one as the shake out in the handle was a little
iffy, there was not a strong push after the breakout and the rest of this
defensive industry is not particularly healthy.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Spencer48@aol.com
Sent: Thursday, December 19, 2002 1:54 PM
To: canslim@lists.xmission.com
Subject: Re: help with pivots: was Re: [CANSLIM] Worley's Weekend
Weeview


Katherine:

     With the mkt. being as it is-as you point out-I agree: I wouldn't buy
CEDC now.  As you observe: Most current BO's are failing nowadays.  However
(I'm looking at DGO), the funds (I'm assuming that they are the institutions
that matter.  If others also are relevant, why do you think that?) aren't
declining (Dec '01: 6; Mar '02: 9; June '02: 8; Sep '02: 9).

     On the daily, I see the wedging handle (however, I don't think that I
agree with you that CEDC has failed yet-although, as I mentioned, due to the
mkt., I wouldn't buy it now (as for selling it-I don't know if I'd do it
now.
I'd probably wait to see how it closes [vis a vis its range] on this high
ADV
day.

     The reason why I've put this stock on my Watchlist:  The weekly has a
very nice C&H.  There indeed was a BO on the weekly earlier this week, and
it
admittedly is now below the BO point; however, I'd see how CEDC functions
now.  For instance, I'd see how the stock acts relative to its right lip top
(which I put at 17.67).  Also, I like the slope of its relative strength
line; and 3-4 weeks ago the up 50 penetrated above the up 200.

     Also, fundamentally, debt is only 16% of equity, and mgt. owns 44% of
the company!.  Once funds recognize its chart for what it is (strong, in my
opinion) I believe they will start loading up on it (they now own only 5%).
And once that happens, with CEDC's relatively low PE (19) and its projected
earnings, I believe CEDC will rise quickly.

jans





In a message dated 12/19/2002 9:16:21 AM Eastern Standard Time,
kmalm@earthlink.net writes:

<< The real problem is that I can't find another decent chart in CEDC's
industry
 (all RS's in the 60's or lower and while some are struggling with a flat
line,
 there aren't any other stocks even attempting a breakout). Add that to a
net
 decline in institutional ownership, a sloppy (slightly wedging) handle and
a
 poor showing after an attempted breakout and I'd mark this one off as "high
 risk," particularly given current market conditions. Even the few breakouts
that
 are working are struggling to stay afoot. Maybe CEDC will pause here and
 consolidate, as it appears to be the leader in the group, but I'd be
surprised
 to see it move up with any conviction right away. >>

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