RE: [CANSLIM] How much support is the 50 DMA? (JOSB)

From: Tomas <tomas986@yahoo.com>
Subject: RE: [CANSLIM] How much support is the 50 DMA? (JOSB)
Date: Tue, 6 May 2003 13:10:12 -0700 (PDT)
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Top of Thread: RE: [CANSLIM] How much support is the 50 DMA? (JOSB) "Katherine Malm"
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Katherine,

I'll second that!  Thank you for the GREAT analytical
answer.

tomas

- --- michael_niemotka@baxter.com wrote:
> 
> Katherine,
> 
> Great answer, as usual.  One question about BSTE. 
> What about it's chart
> kept it from being identified as a cwh with your
> algorithms?  The chart did
> not slow left lip, low point, pivot...
> 
> Just curious
> 
> Thanks
> 
> Mike
> 
> Mike Niemotka , PE
> Sr. Principal Engineer
> Baxter Healthcare Corporation
> Route 120 & Wilson Road
> Round Lake, IL 60073
> Tel (847) 270-4075
> Fax (847) 270-4525
> michael_niemotka@baxter.com
> 
> 
>                                                     
>                                                     
>                   
>                     "Katherine Malm"                
>                                                     
>                   
>                     <kmalm@earthlink.net>        To:
>     canslim@lists.xmission.com                      
>                   
>                     Sent by:                     cc:
>                                                     
>                   
>                     owner-canslim@lists.xm      
> Subject:     RE: [CANSLIM] How much support is the
> 50 DMA? (JOSB)          
>                     ission.com                      
>                                                     
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>                     05/06/2003 09:56 AM             
>                                                     
>                   
>                     Please respond to               
>                                                     
>                   
>                     canslim                         
>                                                     
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> 
> 
> 
> 
> Hi Chris,
> 
> I see several folks have already commented on the
> discipline of selling, so
> thought I'd focus on a slightly different angle.
> That is, something I call
> "wiggle room" or "the best selling rule is to buy
> right."
> 
> The biggest problem I see with your JOSB situation
> is that by buying late,
> you took away all your wiggle room. JOSB set up with
> a pivot established
> 3/21 at $25.51. It put in a poor handle which didn't
> drift down, indicating
> a possible lack of shakeout, then staged a wimpy
> breakout on 4/2 (though it
> did show some follow through action the next day).
> With those credentials,
> buying right is particularly important. Odds favor,
> at minimum, a pullback
> at least to the original breakout area around 25-26.
> Sure enough, that's
> what happened. As your purchase was late, when the
> stock was already 13%
> extended from the breakout price, you have no wiggle
> room to survive a
> pullback without triggering your 8% rule. Notice
> that your original mental
> stop at $27 was above the logical support area.  See
> an annotated chart at:
> 
> http://www.cwhcharts.com/katherine/JOSB050603.JPG
> 
> These kinds of pullbacks are fairly common. BSTE did
> the same thing
> recently and if purchased correctly, one could've
> sat out the minor
> correction without triggering sell rules. Take a
> look at the reward:
> 
> http://www.cwhcharts.com/katherine/BSTE050603.JPG
> 
> Katherine
>      -----Original Message-----
>      From: owner-canslim@lists.xmission.com
>      [mailto:owner-canslim@lists.xmission.com]On
> Behalf Of Chris Jones
>      Sent: Monday, May 05, 2003 3:45 PM
>      To: CANSLIM
>      Subject: [CANSLIM] How much support is the 50
> DMA? (JOSB)
> 
>      I have a dilemma - I bought JOSB a few weeks
> back and put a mental
>      stop in at $27 (8%).  When I checked today
> after the market closed, I
>      saw it had dropped $1.88, and is now at $25.51.
>  I'm a little mad that
>      I only placed a mental stop, which could have
> avoided this, however I
>      can't change that now.  Normally I would sell
> right at the market
>      since my loss has now dropped to 12%, but the
> stock now sits about
>      $.25 above it's 50 DMA.  Should I hang on and
> hope institutions will
>      step in?  IBD says "many institutions view the
> 50-day line as a level
>      at which they can add to their positions at a
> reasonable price. That's
>      why many strong stocks find "support" at this
> line."  However, it
>      seems that the 50 DMA hasn't been too much of a
> support/resistance for
>      JOSB in the past.  I hate to wait and hope,
> since that's exactly what
>      O'Neil said bad investors do, but the 50 DMA
> adds an interesting
>      twist.  Should I sell at the market, or wait to
> see if it bounces
>      back?  Opinions are appreciated!
> 
>      Thanks so much!
> 
>      Chris
> 
> 
> 
> 
> 
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