RE: [CANSLIM] Right side of cup variations...

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Right side of cup variations...
Date: Tue, 17 Jun 2003 20:18:07 -0500

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Hi Bill,

For FNIS specifically, the big gap up is due to a proposed buyout offer. I'd
say that this is not really typical basing action. Unless you're already in
a stock when the deal is announced, I'd say avoid these altogether, as
arbitrage controls the price at that point.

In other cases, big gaps on the right of the base do occur, but part of what
makes a base "a good base" is some degree of symmetry. For example, if a
stock falls to the lows of its consolidation over a period of 5 months and
then suddenly jumps up the right side of the base in a few sessions, then it
lacks that symmetry and becomes more prone to shake outs that would
otherwise have occurred as it built the right side of the base over time.

Katherine


- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Bill Triffet
Sent: Tuesday, June 17, 2003 12:50 PM
To: canslim
Subject: [CANSLIM] Right side of cup variations...


I have noticed on some occasions there are bases where the right side of the
cup is completed by perhaps only one or two gap ups. An example might be
FNIS. Notice the gapup on 5/27 that forms most of the right side.
Note: I'm only refering to its right side cup as an example and not the
upwards handle or fundies which are suspect for me...

Now, assumming the handle and volume are behaving...would the gapups on the
right side be a red/yellow flag for a "solid" base?

- --
Bill

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