Go to Jeff Salisbury LWGate Home Page.From: "Norman Boyd" <theboyd@tisd.net>
Subject: Re: [CANSLIM] TSCO
Date: Fri, 20 Jun 2003 17:46:34 -0500
Previous Article (by Subject): Re: [CANSLIM] tchc - entry point Ian
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This is a multi-part message in MIME format. - ------=_NextPart_000_0075_01C33753.E44164D0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit "...benign pullback " Katherine, I like that terminology. Not all pullbacks are equal. The latest GRMN pull back is a good example. Bad news regarding a missed contract and an analysts downgrade render this high vol pull back "malignant." However, a couple of weeks ago there were many low volume "benign" pull backs to choose from. Norm ----- Original Message ----- From: Katherine Malm To: canslim@lists.xmission.com Sent: Wednesday, June 18, 2003 7:56 AM Subject: RE: [CANSLIM] TSCO Hi Harold, In the context of the discussion, a stock that is *already* rising from a previous consolidation affords no low-risk entry point. With TSCO, an entry here puts you at risk of sitting out another pullback to the previous logical area of support. In this case, that can be all the way back to the previous pivot, slightly below (as that wide bar during the last pullback just after the last BO suggests), or somewhere around the 50dMA. The slight wedging action in recent weeks suggests that the probability of a pullback is very high, and particularly if one uses an 8% stop loss, the probability of being shaken out is therefore very high. If one really likes this stock, then it's a lot smarter to wait for a benign pullback and take your chances that it begins to move up again from the pullback, as your odds of making money on the trade are considerably higher. This is precisely what Fred has done for a couple of years, purchasing on pullbacks and selling TSCO many times since 12/01. I think the lesson with something like TSCO is that the 8% stop loss is a protective mechanism for entry at the ideal buy point (a strong BO on volume from a base), as the pullback here tends not to be much deeper if the BO is strong. However, using an 8% stop when entering an extended stock is just and excuse to loose 8%. There are plenty of good stocks out there, but one can purcase "a very good stock" and still lose their shirt 8% at a time. When a stock is extended, the 8% stop has no logic, because the next logical area of support is generally much, much lower than 8% below the extended entry. Even if one were to set a stop well below the 8% and back at logical support, then the risk is that the stock not only pulls back but *fails* outright, falling back into the base. At that point, a stop would force you out at a much bigger loss than 8%. Oooh...makes me shiver to think about it. Katherine -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Harold Josephson Sent: Wednesday, June 18, 2003 1:09 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] TSCO Hi Katherine, What do you conclude from this chart? Thanks Harold -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Monday, June 16, 2003 11:07 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] TSCO Hi Treb, Here's the chart as I see it: http://www.cwhcharts.com/katherine/TSCO061603.JPG Katherine -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Treb Courie Sent: Monday, June 16, 2003 11:48 AM To: canslim@lists.xmission.com Subject: [CANSLIM] TSCO Is TSCO breaking out today? It's got good fundamentals and is on my watch list. However, I think I'm going to stay off of it--it looks to me like it broke out of a sloppy handle on 2 June and is too extended now. Regards, Treb - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_0075_01C33753.E44164D0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 5.50.4522.1800" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>"...benign pullback "</DIV> <DIV> </DIV> <DIV>Katherine, I like that terminology. Not all pullbacks are=20 equal. The latest GRMN pull back is a good example. Bad news = regarding a missed contract and an analysts downgrade render this = high vol=20 pull back "malignant." However, a couple of weeks ago there were = many low=20 volume "benign" pull backs to choose from.</DIV> <DIV> </DIV> <DIV>Norm</DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Dkmalm@earthlink.net = href=3D"mailto:kmalm@earthlink.net">Katherine=20 Malm</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, June 18, 2003 = 7:56=20 AM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] = TSCO</DIV> <DIV><BR></DIV>Hi Harold,<BR><BR>In the context of the discussion, a = stock=20 that is *already* rising from a<BR>previous consolidation affords no = low-risk=20 entry point. With TSCO, an entry<BR>here puts you at risk of sitting = out=20 another pullback to the previous<BR>logical area of support. In this = case,=20 that can be all the way back to the<BR>previous pivot, slightly below = (as that=20 wide bar during the last pullback<BR>just after the last BO suggests), = or=20 somewhere around the 50dMA. The slight<BR>wedging action in recent = weeks=20 suggests that the probability of a pullback<BR>is very high, and = particularly=20 if one uses an 8% stop loss, the probability<BR>of being shaken out is = therefore very high.<BR><BR> If one really likes this stock, then = it's a=20 lot smarter to wait for a<BR>benign pullback and take your chances = that it=20 begins to move up again from<BR>the pullback, as your odds of making = money on=20 the trade are considerably<BR>higher. This is precisely what Fred has = done for=20 a couple of years,<BR>purchasing on pullbacks and selling TSCO many = times=20 since 12/01.<BR><BR>I think the lesson with something like TSCO is = that the 8%=20 stop loss is a<BR>protective mechanism for entry at the ideal buy = point (a=20 strong BO on volume<BR>from a base), as the pullback here tends not to = be much=20 deeper if the BO is<BR>strong. However, using an 8% stop when entering = an=20 extended stock is just<BR>and excuse to loose 8%. There are plenty of = good=20 stocks out there, but one<BR>can purcase "a very good stock" and still = lose=20 their shirt 8% at a time.<BR>When a stock is extended, the 8% stop has = no=20 logic, because the next logical<BR>area of support is generally much, = much=20 lower than 8% below the extended<BR>entry. Even if one were to set a = stop well=20 below the 8% and back at logical<BR>support, then the risk is that the = stock=20 not only pulls back but *fails*<BR>outright, falling back into the = base. At=20 that point, a stop would force you<BR>out at a much bigger loss than = 8%.=20 Oooh...makes me shiver to think about=20 it.<BR><BR>Katherine<BR><BR>-----Original Message-----<BR>From: <A=20 = href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis= sion.com</A><BR>[mailto:owner-canslim@lists.xmission.com]On=20 Behalf Of Harold Josephson<BR>Sent: Wednesday, June 18, 2003 1:09 = AM<BR>To: <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= <BR>Subject:=20 RE: [CANSLIM] TSCO<BR><BR><BR><BR>Hi Katherine,<BR><BR>What do you = conclude=20 from this chart?<BR><BR>Thanks<BR><BR>Harold<BR><BR>-----Original=20 Message-----<BR>From: <A=20 = href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis= sion.com</A><BR>[mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of Katherine Malm<BR>Sent: Monday, June 16, 2003 11:07 = AM<BR>To: <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= <BR>Subject:=20 RE: [CANSLIM] TSCO<BR><BR>Hi Treb,<BR><BR>Here's the chart as I see=20 it:<BR><BR><A=20 = href=3D"http://www.cwhcharts.com/katherine/TSCO061603.JPG">http://www.cwh= charts.com/katherine/TSCO061603.JPG</A><BR><BR>Katherine<BR><BR>-----Orig= inal=20 Message-----<BR>From: <A=20 = href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis= sion.com</A><BR>[mailto:owner-canslim@lists.xmission.com]On=20 Behalf Of Treb Courie<BR>Sent: Monday, June 16, 2003 11:48 AM<BR>To: = <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= <BR>Subject:=20 [CANSLIM] TSCO<BR><BR><BR>Is TSCO breaking out today? It's got = good=20 fundamentals and is on my watch<BR>list. However, I think I'm = going to=20 stay off of it--it looks to me like it<BR>broke out of a sloppy handle = on 2=20 June and is too extended now.<BR><BR>Regards,<BR>Treb<BR><BR>-<BR>-To=20 subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.<BR><BR><BR><BR>-<BR>-To = subscribe/unsubscribe,=20 email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.<BR><BR><BR><BR>-<BR>-To = subscribe/unsubscribe,=20 email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.<BR><BR><BR><BR>-<BR>-To = subscribe/unsubscribe,=20 email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.<BR><BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0075_01C33753.E44164D0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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