Re: [CANSLIM] Question about 5% rule

From: Ian <ianstm@shaw.ca>
Subject: Re: [CANSLIM] Question about 5% rule
Date: Wed, 07 May 2003 09:37:17 -0700

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Hi Bob:

I troll in these waters. For sub $10 stocks, I try to buy within 40 cents of the trigger point, but I'm flexible on the rule. A lot of it has to do with how technically extended the stock is at the breakout point. If its been a nice flatline base, you have a higher chance of being forced to 'pay up' greater than 5%, as the stock will probably gap away. If the stock has had a strong move up to the trigger point, it will be much more likely to pullback near the trigger point, and allow you to get in near 5%.

Ian




- ----- Original Message ----- 
  From: rchodes 
  To: Canslim 
  Sent: Monday, May 05, 2003 8:00 PM
  Subject: [CANSLIM] Question about 5% rule


  I have a question about the rule not to buy a stock that has moved up in price more than 5% above the pivot point.  This rule is easy to follow if the stock price is above $15.  I know that some of you, such as Tom, follow small caps that may have a price below $10, perhaps in the $5 range.  Well 5% of $5 is .25 and it's pretty hard to jump onto that sucker before it goes up .25 from the pivot point.
   
  One can always cheat and buy before the anticipated breakout.  Or you can expand the 5% rule to maybe 15% or so.  To those of you who troll in these waters, what do you?  Thanks.
   
  Bob Hodes

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<DIV><FONT size=2>Hi Bob:</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>I troll in these waters. For sub $10 stocks, I try to buy 
within 40 cents of the trigger point, but I'm flexible on the rule. A lot of it 
has to do with how technically extended the stock is at the breakout point. If 
its been a nice flatline base, you have a higher chance of being forced to 'pay 
up' greater than 5%, as the stock will probably gap away. If the stock has had a 
strong move up to the trigger point, it will be much more likely to pullback 
near the trigger point, and allow you to get in near 5%.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>Ian</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE 
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
  <DIV 
  style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> 
  <A href="mailto:rchodes@charter.net" title=rchodes@charter.net>rchodes</A> 
  </DIV>
  <DIV style="FONT: 10pt arial"><B>To:</B> <A 
  href="mailto:canslim@lists.xmission.com" 
  title=canslim@lists.xmission.com>Canslim</A> </DIV>
  <DIV style="FONT: 10pt arial"><B>Sent:</B> Monday, May 05, 2003 8:00 PM</DIV>
  <DIV style="FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Question about 5% 
  rule</DIV>
  <DIV><BR></DIV>
  <DIV><FONT face=Arial size=2>I have a question about the rule not to buy a 
  stock that has moved up in price more than 5% above the pivot point.&nbsp; 
  This rule is easy to follow if the stock price is above $15.&nbsp; I know that 
  some of you, such as Tom, follow small caps that may have a price below $10, 
  perhaps in the $5 range.&nbsp; Well 5% of $5 is .25 and it's pretty hard to 
  jump onto that sucker before it goes up .25 from the pivot point.</FONT></DIV>
  <DIV><FONT face=Arial size=2></FONT>&nbsp;</DIV>
  <DIV><FONT face=Arial size=2>One can always cheat and buy before the 
  anticipated breakout.&nbsp; Or you can expand the 5% rule to maybe 15% or 
  so.&nbsp; To those of you who troll in these waters, what do you?&nbsp; 
  Thanks.</FONT></DIV>
  <DIV><FONT face=Arial size=2></FONT>&nbsp;</DIV>
  <DIV><FONT face=Arial size=2>Bob Hodes</FONT></DIV></BLOCKQUOTE></BODY></HTML>

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