Go to Jeff Salisbury LWGate Home Page.From: Roger Tawa <roger@tawacentral.net>
Subject: RE: [CANSLIM] RE:Handles (was:How much support is the 50 DMA? (JOSB))
Date: Tue, 06 May 2003 23:20:39 -0400
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- --Boundary_(ID_JqL+aX8AwjJ50YjaYy+N9Q)
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Thanks Katherine.
This email is definitely a keeper, from before I joined the list.
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D
Roger Tawa
http://tawacentral.net/
[One thing about paradigms: shift happens.]
[When you stop, you're done.]
- -----Original Message-----
=46rom: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Tuesday, May 06, 2003 10:59 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] RE:Handles (was:How much support is the 50 DMA? (J=
OSB))
Hi Roger,
An "ideal" handle will drift down on decreasing volume. WON considers=
this
drifting down to be one of the most important factors in a good handl=
e. If
there is a shake out day or two on high volume *within* the handle, t=
hat's a
good thing, especially if the days end in the upper part of their ran=
ge.
(Plenty more handle characteristics--see a more complete list at the =
end of
this email ).
That said, it's honestly rare that you get "perfection" in a handle. =
My
comment on JOSB was that the lack of drift down and/or shakeout *with=
in* the
handle made it a "poor quality" handle. That generally adds to your r=
isk,
but plenty of breakouts occur from less than perfect bases and less t=
han
perfect handles. It's all a matter of odds--just part of the decision
process when determining whether to take a breakout or not. My overal=
l point
on JOSB is that given the lack of drift down in the handle, the risk =
of a
pullback *after* breakout then increases. That's essentially what hap=
pened.
Buying late after a higher risk breakout increases your odds of getti=
ng
caught in a pullback.
Katherine ...handle info follows:
- ----- Original Message -----
=46rom: Katherine Malm <mailto:kmalm@earthlink.net>
To: canslim@lists.xmission.com <mailto:canslim@lists.xmission.com>
Sent: Friday, August 16, 2002 4:53 PM
Subject: [CANSLIM] Re: Handles, A list of Characteristics
HANDLES
General Requirements:
1. Handles most often begin to form lower than the left side of the b=
ase,
generally when the stock has climbed within 5-15% of the high.
2. The midpoint of a good handle should be higher than the midpoint o=
f the
base.
3. The handle should form in the upper half of the base.
4. The handle should form above the 200 day MA, but trade may often l=
ull
below the 50 day MA.
5. The handle should drift sideways or lower. Upward "wedging" handle=
s are
failure prone because the upwardly drifting price doesn't shake out t=
he weak
holders, leaving the stock vulnerable to a correction. Wedging handle=
s also
make pivots harder to spot. WON considers this the most important asp=
ect of
a handle formation.
6. The handle should drift lower on light volume. This shows existing
holders are content to remain invested.
7. Within the handle, volatility should contract. The distance betwee=
n price
highs and lows (intraday and day to day) should narrow. Avoid zigzagg=
ing or
wide and loose handles. Choppy handles carry more uncertainty.
8. In normal markets, proper handles correct 10-20%. In Bear markets,=
they
can correct as much as 30%. A handle that drifts <10% is fine as long=
as it
is drifting downward and meets other requirements.
9. The handle must be at least one week in length but can stretch as =
much as
7-10 weeks. It should be smaller in proportion to the size of the cup=
.
Special Considerations:
1. "High handles" can begin to form at prices higher than the left si=
de of
the base. This is neither ideal nor common, but can still be successf=
ul as
long as the other handle requirements are met.
2. Be sure to look at both daily and weekly charts, as stocks with le=
ngthy
bases will have long handles. The lengthy handle may appear as a base=
if
looking at a daily chart. Long bases signal strong support and are ve=
ry
strong patterns. (The longer the base, the stronger the subsequent mo=
ve.)
Based on a study done by the IBD in 96-97, small and mid cap stocks h=
ad 33
week bases on average. Large caps had 66 week bases on average.
3. A stock can form a handle, near its pivot point and then begin for=
ming
another handle. In this case, consider this to be one long handle.
4. "No-handle" bases are more error prone, but tend to work at the st=
art of
a fresh rally, especially if the rally is strong. Look for volume to =
dry up
as the stock comes within 5-10% of its old peak. Stocks breaking out =
of
bases without a handle are most likely industry leaders; lead the mar=
ket in
relative price performance, sales and earnings growth; and have high
institutional sponsorship.
5. Double bottom bases can form a handle, though normally they do not=
do so.
[Note: These notes are compiled from many years worth of Investors' C=
orners,
HTMMIS, the IBD web site and other misc. sources.]
- --Katherine
- -----Original Message-----
=46rom: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Roger Tawa
Sent: Tuesday, May 06, 2003 8:13 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] How much support is the 50 DMA? (JOSB)
Hi Katherine,
I have a question with regard to your =93poor=94 handle comment. Acc=
ording to
24 lessons, page 47, a handle should drift down on lows *OR* have a s=
hake
out. In this case, the shake out did happen on the two days after th=
e
pivot.
Furthermore, at the top of page 48, it says a proper handle will dry =
up near
its lows, which this one seems to do, *OR* will have several tight ar=
eas,
which this one also has.
Finally, the JOSB handle actually looks very much like the handle of
Microsoft shown in the example on page 46.
Now, being a novice at this, I would have looked at this handle and s=
aid
=93looks good=94 by the time april 1st came around.
Do you feel that the handle should drift down along its lows for the =
entire
duration of handle before it breaks out? Would you consider this a b=
etter
indication of a good handle than the other things? Thanks.
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D
Roger Tawa
http://tawacentral.net/
[One thing about paradigms: shift happens.]
[When you stop, you're done.]
- -----Original Message-----
=46rom: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Tuesday, May 06, 2003 10:57 AM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] How much support is the 50 DMA? (JOSB)
Hi Chris,
I see several folks have already commented on the discipline of selli=
ng, 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 establis=
hed
3/21 at $25.51. It put in a poor handle which didn't drift down, indi=
cating
a possible lack of shakeout, then staged a wimpy breakout on 4/2 (tho=
ugh it
did show some follow through action the next day). With those credent=
ials,
buying right is particularly important. Odds favor, at minimum, a pul=
lback
at least to the original breakout area around 25-26. Sure enough, tha=
t'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 m=
ental
stop at $27 was above the logical support area. See an annotated cha=
rt at:
http://www.cwhcharts.com/katherine/JOSB050603.JPG
These kinds of pullbacks are fairly common. BSTE did the same thing r=
ecently
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-----
=46rom: 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 st=
op 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 pl=
aced a
mental stop, which could have avoided this, however I can't change th=
at now.
Normally I would sell right at the market since my loss has now dropp=
ed to
12%, but the stock now sits about $.25 above it's 50 DMA. Should I h=
ang 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 thi=
s
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, si=
nce
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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=3D"#993366"
face=3DArial><span style=3D'font-size:10.0pt;mso-bidi-font-size:12.0p=
t;font-family:
Arial'>Thanks Katherine.<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal><span class=3DEmailStyle21><font size=3D2 color=
=3D"#993366"
face=3DArial><span style=3D'font-size:10.0pt;mso-bidi-font-size:12.0p=
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<p class=3DMsoNormal><span class=3DEmailStyle21><font size=3D2 color=
=3D"#993366"
face=3DArial><span style=3D'font-size:10.0pt;mso-bidi-font-size:12.0p=
t;font-family:
Arial'>This email is definitely a keeper, from before I joined the li=
st.<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal><span class=3DEmailStyle21><font size=3D2 color=
=3D"#993366"
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xt'><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 color=3D"#993366" face=3D"Times N=
ew Roman"><span
style=3D'font-size:12.0pt;color:#993366'>Roger Tawa</span></font><fon=
t
color=3D"#993366"><span style=3D'color:#993366;mso-color-alt:windowte=
xt'><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 color=3D"#993366" face=3D"Times N=
ew Roman"><span
style=3D'font-size:12.0pt;color:#993366'>http://tawacentral.net/</spa=
n></font><font
color=3D"#993366"><span style=3D'color:#993366;mso-color-alt:windowte=
xt'><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 color=3D"#993366" face=3D"Times N=
ew Roman"><span
style=3D'font-size:12.0pt;color:#993366'>[One thing about paradigms: =
shift
happens.]</span></font><font color=3D"#993366"><span style=3D'color:#=
993366;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 color=3D"#993366" face=3D"Times N=
ew Roman"><span
style=3D'font-size:12.0pt;color:#993366'>[When you stop, you're done.=
]</span></font><font
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xt'><o:p></o:p></span></font></p>
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'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font>=
</span></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 color=
=3Dblack
face=3DTahoma><span style=3D'font-size:10.0pt;font-family:Tahoma;colo=
r:black'>-----Original
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission=
.com]<b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Katherine Malm<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Tuesday, May 06,=
2003 10:59
PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> canslim@lists.xmis=
sion.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> [CANSLIM] RE:=
Handles
(was:How much support is the 50 DMA? (JOSB))</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=
=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><![if !supportEmptyParas]> <![endif]>=
<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>Hi Roger,</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>An
"ideal" handle will drift down on decreasing volume. WON co=
nsiders
this drifting down to be one of the most important factors in a good =
handle. If
there is a shake out day or two on high volume *within* the hand=
le, that's
a good thing, especially if the days end in the upper part of their r=
ange.
(Plenty more handle characteristics--see a more complete list at =
;the end
of this email ).</span></font><font color=3Dblack><span style=
=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>That said,
it's honestly rare that you get "perfection" in a handle. M=
y comment
on JOSB was that the lack of drift down and/or shakeout *within* the =
handle
made it a "poor quality" handle. That generally adds to you=
r risk,
but plenty of breakouts occur from less than perfect bases and less t=
han
perfect handles. It's all a matter of odds--just part of the decision=
process
when determining whether to take a breakout or not. My over=
all point
on JOSB is that given the lack of drift down in the handle, the risk =
of a
pullback *after* breakout then increases. That's essentially what hap=
pened. Buying
late after a higher risk breakout increases your odds of getting caug=
ht in a
pullback.</span></font><font color=3Dblack><span style=3D'color:black=
;mso-color-alt:
windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>Katherine
=2E..handle info follows:</span></font><font color=3Dblack><span styl=
e=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>-----
Original Message ----- </span></font><font color=3Dblack><span style=
=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<div style=3D'border:none;border-left:solid black 2.25pt;padding:0in =
0in 0in 5.0pt;
background:#E4E4E4'>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;border:none;mso-border-left-alt:solid black 2.25pt=
;
padding:0in;mso-padding-alt:0in 0in 0in 5.0pt'><b><font size=3D2 colo=
r=3Dblack
face=3DArial><span style=3D'font-size:10.0pt;font-family:Arial;color:=
black;
font-weight:bold'>From:</span></font></b><font size=3D2 color=3Dblack=
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:black'> <a
href=3D"mailto:kmalm@earthlink.net" title=3D"kmalm@earthlink.net">Kat=
herine Malm</a>
</span></font><font size=3D2 color=3Dblack face=3DArial><span style=
=3D'font-size:10.0pt;
font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></=
span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><b><font
size=3D2 color=3Dblack face=3DArial><span style=3D'font-size:10.0pt;f=
ont-family:Arial;
color:black;font-weight:bold'>To:</span></font></b><font size=3D2 col=
or=3Dblack
face=3DArial><span style=3D'font-size:10.0pt;font-family:Arial;color:=
black'> <a
href=3D"mailto:canslim@lists.xmission.com" title=3D"canslim@lists.xmi=
ssion.com">canslim@lists.xmission.com</a>
</span></font><font size=3D2 color=3Dblack face=3DArial><span style=
=3D'font-size:10.0pt;
font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></=
span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><b><font
size=3D2 color=3Dblack face=3DArial><span style=3D'font-size:10.0pt;f=
ont-family:Arial;
color:black;font-weight:bold'>Sent:</span></font></b><font size=3D2 c=
olor=3Dblack
face=3DArial><span style=3D'font-size:10.0pt;font-family:Arial;color:=
black'>
Friday, August 16, 2002 4:53 PM</span></font><font size=3D2 color=
=3Dblack
face=3DArial><span style=3D'font-size:10.0pt;font-family:Arial;color:=
black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><b><font
size=3D2 color=3Dblack face=3DArial><span style=3D'font-size:10.0pt;f=
ont-family:Arial;
color:black;font-weight:bold'>Subject:</span></font></b><font size=
=3D2
color=3Dblack face=3DArial><span style=3D'font-size:10.0pt;font-famil=
y:Arial;
color:black'> [CANSLIM] Re: Handles, A list of Characteristics</span>=
</font><font
size=3D2 color=3Dblack face=3DArial><span style=3D'font-size:10.0pt;f=
ont-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>HANDLES</span></font><font color=3Dblack><span style=
=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><em><i><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>General Requirements:</span></font></i></em><font color=
=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>1. Handles most often begin to form lower than the left =
side of
the base, generally when the stock has climbed within 5-15% of the hi=
gh.</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>2. The midpoint of a good handle should be higher than t=
he
midpoint of the base.</span></font><font color=3Dblack><span style=
=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>3. The handle should form in the upper half of the base.=
</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>4. The handle should form above the 200 day MA, but trad=
e may
often lull below the 50 day MA.</span></font><font color=3Dblack><spa=
n
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>5. The handle should drift sideways or lower. Upward
"wedging" handles are failure prone because the upwardly dr=
ifting
price doesn't shake out the weak holders, leaving the stock vulnerabl=
e to a
correction. Wedging handles also make pivots harder to spot. <em><i>W=
ON
considers this the most important aspect of a handle formation.</i></=
em></span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>6. The handle should drift lower on light volume. This s=
hows
existing holders are content to remain invested.</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>7. Within the handle, volatility should contract. The di=
stance
between price highs and lows (intraday and day to day) should narrow.=
Avoid
zigzagging or wide and loose handles. Choppy handles carry more uncer=
tainty.</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>8. In normal markets, proper handles correct 10-20%. In =
Bear
markets, they can correct as much as 30%. A handle that drifts <10=
% is fine
as long as it is drifting downward and meets other requirements.</spa=
n></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>9. The handle must be at least one week in length but ca=
n stretch
as much as 7-10 weeks. It should be smaller in proportion to the size=
of the
cup.</span></font><font color=3Dblack><span style=3D'color:black;mso-=
color-alt:
windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'> </span></font><font color=3Dblack><span style=3D'c=
olor:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><em><i><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>Special Considerations:</span></font></i></em><font colo=
r=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>1. "High handles" can begin to form at prices =
higher
than the left side of the base. This is neither ideal nor common, but=
can still
be successful as long as the other handle requirements are met.</span=
></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>2. Be sure to look at both daily and weekly charts, as s=
tocks with
lengthy bases will have long handles. The lengthy handle may appear a=
s a base
if looking at a daily chart. Long bases signal strong support and are=
very
strong patterns. (The longer the base, the stronger the subsequent mo=
ve.) Based
on a study done by the IBD in 96-97, small and mid cap stocks had 33 =
week bases
on average. Large caps had 66 week bases on average.</span></fon=
t><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>3. A stock can form a handle, near its pivot point and t=
hen begin
forming another handle. In this case, consider this to be one lo=
ng handle.</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>4. "No-handle" bases are more error prone, but=
tend to
work at the start of a fresh rally, especially if the rally is strong=
. Look for
volume to dry up as the stock comes within 5-10% of its old peak. Sto=
cks
breaking out of bases without a handle are most likely industry leade=
rs; lead
the market in relative price performance, sales and earnings growth; =
and have
high institutional sponsorship.</span></font><font color=3Dblack><spa=
n
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>5. Double bottom bases can form a handle, though normall=
y they do
not do so. </span></font><font color=3Dblack><span style=3D'color:bla=
ck;mso-color-alt:
windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'> </span></font><font color=3Dblack><span style=3D'c=
olor:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>[Note: These notes are compiled from many years worth of
Investors' Corners, HTMMIS, the IBD web site and other misc. sources.=
]</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'> </span></font><font color=3Dblack><span style=3D'c=
olor:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:41.0pt;background:white;mso-shading:transparent;border:no=
ne;
mso-border-left-alt:solid black 2.25pt;padding:0in;mso-padding-alt:0i=
n 0in 0in 5.0pt'><font
size=3D3 color=3Dblack face=3D"Times New Roman"><span style=3D'font-s=
ize:12.0pt;
color:black'>--Katherine</span></font><font color=3Dblack><span style=
=3D'color:
black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;margin-bottom:1=
2.0pt;
margin-left:1.0in'><font size=3D2 color=3Dblack face=3DTahoma><span s=
tyle=3D'font-size:
10.0pt;font-family:Tahoma;color:black'>-----Original Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b> owner-canslim@li=
sts.xmission.com
[mailto:owner-canslim@lists.xmission.com]<b><span style=3D'font-weigh=
t:bold'>On
Behalf Of </span></b>Roger Tawa<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Tuesday, May 06,=
2003 8:13
PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> canslim@lists.xmis=
sion.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> RE: [CANSLIM]=
How much
support is the 50 DMA? (JOSB)</span></font><font color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'>Hi Katherine,<o:p></o:p></span></font></spa=
n></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'>I have a question with regard to your ̶=
0;poor” handle
comment.<span style=3D"mso-spacerun: yes"> </span>According to =
24 lessons,
page 47, a handle should drift down on lows *<b><span style=3D'font-w=
eight:bold'>OR</span></b>*
have a shake out.<span style=3D"mso-spacerun: yes"> </span>In t=
his case,
the shake out did happen on the two days after the pivot.<o:p></o:p><=
/span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'>Furthermore, at the top of page 48, it says=
a proper
handle will dry up near its lows, which this one seems to do, *<b><sp=
an
style=3D'font-weight:bold'>OR</span></b>* will have several tight are=
as, which
this one also has.<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'>Finally, the JOSB handle actually looks ver=
y much
like the handle of Microsoft shown in the example on page 46.<o:p></o=
:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'>Now, being a novice at this, I would have l=
ooked at
this handle and said “looks good” by the time april 1<sup=
>st</sup> came around.<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle19><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'>Do you feel that the handle should drift do=
wn along
its lows for the entire duration of handle before it breaks out?<span
style=3D"mso-spacerun: yes"> </span>Would you consider this a b=
etter
indication of a good handle than the other things?<span style=3D"mso-=
spacerun:
yes"> </span>Thanks.<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><span class=3DEmailS=
tyle18><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><!--[if supportField=
s]><span=20
class=3DEmailStyle18><font size=3D2 color=3Dnavy face=3DArial><span s=
tyle=3D'font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><span style=3D'ms=
o-element:
field-begin'></span><span style=3D"mso-spacerun: yes"> </span>AU=
TOTEXTLIST=20
\s "E-mail Signature" <span style=3D'mso-element:field-sepa=
rator'></span></span></font></span><![endif]--><font
color=3Dnavy><span style=3D'color:navy'>=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D</span></font><=
font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 color=
=3Dnavy
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:navy'>=
Roger Tawa</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 color=
=3Dnavy
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:navy'>=
http://tawacentral.net/</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 color=
=3Dnavy
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:navy'>=
[One thing
about paradigms: shift happens.]</span></font><font color=3Dblack><sp=
an
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 color=
=3Dnavy
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:navy'>=
[When you
stop, you're done.]</span></font><font color=3Dblack><span style=3D'c=
olor:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><!--[if supportField=
s]><span=20
class=3DEmailStyle18><font size=3D2 color=3Dnavy face=3DArial><span s=
tyle=3D'font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><span style=3D'ms=
o-element:
field-end'></span></span></font></span><![endif]--><span class=3DEmai=
lStyle18><font
size=3D2 color=3Dnavy face=3DArial><span style=3D'font-size:10.0pt;ms=
o-bidi-font-size:
12.0pt;font-family:Arial'> <o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D2 color=
=3Dblack
face=3DTahoma><span style=3D'font-size:10.0pt;font-family:Tahoma;colo=
r:black'>-----Original
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission=
.com]<b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Katherine Malm<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Tuesday, May 06,=
2003 10:57
AM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> canslim@lists.xmis=
sion.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> RE: [CANSLIM]=
How much
support is the 50 DMA? (JOSB)</span></font><font color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>Hi Chris,</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>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."</spa=
n></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>The biggest
problem I see with your JOSB situation is that by buying late, you to=
ok away
all your wiggle room. JOSB set up with a pivot established 3/21 at $2=
5.51. It
put in a poor handle which didn't drift down, indicating a possible l=
ack of
shakeout, then staged a wimpy breakout on 4/2 (though it did show som=
e follow
through action the next day). With those credentials, buying right is
particularly important. Odds favor, at minimum, a pullback at least t=
o the
original breakout area around 25-26. Sure enough, that's what happene=
d. As your
purchase was late, when the stock was already 13% extended from the b=
reakout
price, you have no wiggle room to survive a pullback without triggeri=
ng your 8%
rule. Notice that your original mental stop at $27 was above the logi=
cal
support area. See an annotated chart at:</span></font><font col=
or=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
><a
href=3D"http://www.cwhcharts.com/katherine/JOSB050603.JPG">http://www=
.cwhcharts.com/katherine/JOSB050603.JPG</a></span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>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 withou=
t
triggering sell rules. Take a look at the reward:</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
><a
href=3D"http://www.cwhcharts.com/katherine/BSTE050603.JPG">http://www=
.cwhcharts.com/katherine/BSTE050603.JPG</a></span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
> </span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.5in'><font size=3D3 color=
=3Dblack
face=3D"Times New Roman"><span style=3D'font-size:12.0pt;color:black'=
>Katherine</span></font><font
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;margin-bottom:1=
2.0pt;
margin-left:2.0in'><font size=3D2 color=3Dblack face=3DTahoma><span s=
tyle=3D'font-size:
10.0pt;font-family:Tahoma;color:black'>-----Original Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission=
.com]<b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Chris Jones<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Monday, May 05, =
2003 3:45 PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> CANSLIM<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> [CANSLIM] How=
much
support is the 50 DMA? (JOSB)</span></font><font color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:2.0in'><font size=3D2 color=3Dblack face=3DArial><span st=
yle=3D'font-size:
10.0pt;font-family:Arial;color:black'>I have a dilemma - I bought JOS=
B a few
weeks back and put a mental stop in at $27 (8%). When I ch=
ecked
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, whic=
h 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 sto=
ck now
sits about $.25 above it's 50 DMA. Should I hang on and hope in=
stitutions
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."&n=
bsp;
However, it seems that the 50 DMA hasn't been too much of a support/r=
esistance
for JOSB in the past. I hate to wait and hope, since that's exa=
ctly
what O'Neil said bad investors do, but the 50 DMA adds an intere=
sting
twist. Should I sell at the market, or wait to see if it bounce=
s back?
Opinions are appreciated!</span></font><font color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:2.0in'><font size=3D3 color=3Dblack face=3D"Times New Rom=
an"><span
style=3D'font-size:12.0pt;color:black'> </span></font><font colo=
r=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:2.0in'><font size=3D2 color=3Dblack face=3DArial><span st=
yle=3D'font-size:
10.0pt;font-family:Arial;color:black'>Thanks so much!</span></font><f=
ont
color=3Dblack><span style=3D'color:black;mso-color-alt:windowtext'><o=
:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:2.0in'><font size=3D3 color=3Dblack face=3D"Times New Rom=
an"><span
style=3D'font-size:12.0pt;color:black'> </span></font><font colo=
r=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'mso-margin-top-alt:auto;mso-margin-bott=
om-alt:auto;
margin-left:2.0in'><font size=3D2 color=3Dblack face=3DArial><span st=
yle=3D'font-size:
10.0pt;font-family:Arial;color:black'>Chris</span></font><font color=
=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></fo=
nt></p>
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