Re: [CANSLIM] SHFL

From: Spencer48@aol.com
Subject: Re: [CANSLIM] SHFL
Date: Sun, 11 May 2003 23:47:36 EDT

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Roger:

     The formation you describe (and I also see)-resistance peaks with rising 
troughs-is called an upward triangle.  It is normally bullish.  However, I 
wouldn't put too much credence in SHFL's upward triangle formation because it 
is over such a long period.  Rising triangles usually are some indication of 
bullishness when the formation is over days or weeks (at the most), not-in my 
experience-over years.  (Although, it must be admitted-that the yearly 
formation does denote bullishness in the stock;however, with the stock's 
bullishness being over years-and who wants to wait that long?)


     What I mean "in strong divergence from...?" is that the RSline on Nov 
1st was not surmounted (or perhaps even equalled) by the RSline of last week 
(when SHFL hit resistance again).  To me a rising RSline at peaks and troughs 
in the price (compared with previous peaks and troughs in the stock's price, 
eg. the two downlegs or uplegs of a double bottom) denote strength.  If 
strength is not indicated at these points, then the stock is not ready to be 
bought (it may be a weak stock, or the RSline may be signalling that the 
stock is ripe for a retracement).  If it is a retracement only (eg. the 
Handle of a Cup and Handle), then you should see the stock as revealed in the 
RSline regather its strength as the Handle proceeds.  In that case-assuming 
the overall Market is okay-the stock should generally be bought on the 
BreakOut.

jans

In a message dated 5/11/2003 7:36:48 PM Eastern Daylight Time, 
roger@tawacentral.net writes:

<< I do see the 4 weekly peaks that you mention.  I see what you mean by the
 resistance at 25.  there also 3 weekly troughs in the same period, and these
 are rising.  Does this mean anything?     
 
 What do you mean that the rsline was "in strong divergence from its prior
 resistance peak"?  I am looking at the charts on cwhcharts.com, and the
 rsline's peaks seem to coincide with the price peaks.  Also, the rsline last
 week seemed to be at or making a new high. >>

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