RE: [CANSLIM] FWHT, yet another instance where my tiggerfinger is too slow

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] FWHT, yet another instance where my tiggerfinger is too slow
Date: Wed, 18 Jun 2003 13:58:28 -0500

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Hi All,

Here's a quote from the IBD Archives on breakaway gaps:

Question
  You recommend not buying a stock that has gone up 5 percent above its
pivot point. So how do you buy a stock that gaps up out of a base by more
than 5 percent above the pivot?

  Answer
  Occasionally, a stock will break out of a base by gapping up above the
pivot (buy) point. This is known as a break-away gap, and it is generally a
very bullish sign. The gap up indicates there is enormous demand for the
stock. Our studies have uncovered many former big winners that began their
advances in such a way. If one of the stocks you're following suddenly gaps
up above the proper pivot point, and is more than 5 percent above this
point, you can still buy the stock in this specific instance, assuming the
base pattern is healthy, and all the characteristics identified by our CAN
SLIMT Investment Research Tool are present. Lacking a break-away gap,
however, whenever you buy a stock that's gone up more than 5 percent from
its pivot, the chances of it dropping 8 percent from your purchase price are
greater, regardless of how powerful the stock appears. Even stocks that gap
up after forming healthy bases can fail.


- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Pritish Shah
Sent: Wednesday, June 18, 2003 12:48 PM
To: Chazmoore@aol.com; canslim@lists.xmission.com
Subject: Re: [CANSLIM] FWHT, yet another instance where my tiggerfinger
is too slow


For stocks that gap up dramatically on news, I make an exception if the
chart/fundamentals are good. I made an exception on this and APPX.

I will probably get burnt one of these days but in the meantime, if the
market is strong, I go for it.

If a chart is really good, you could place a buy stop or a stop-limit order
10 cents above the pivot.

Regards,
Pritish

>>> Chazmoore@aol.com 06/18/03 02:20PM >>>
Hi Tomas: I too missed FWHT this morning and there really is no answer other
than setting at the computer all day. However, don't feel too bad about
missing this one because there will be many more if this market stays hot.
Charley


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