Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Second Guessing Myself - SFCC
Date: Fri, 11 Jul 2003 12:43:52 -0500
Next Article (by Date): [CANSLIM] How do you handle volatile Hong Hsu
Previous Article (by Date): Re: [CANSLIM] Re. ROE Spencer48@aol.com
Articles sorted by: [Date]
[Author]
[Subject]
Hi Hong,
In considering all the CANSLIM criteria, there are essentially 2 components.
One set technical, the other fundamental. The general idea being that not
only must the company possess the fundamental characterisitics of "a
CANSLIM-quality candidate" or "growth stock" but also must be technically
positioned for a low-risk entry.
My personal preference is to start first with the technicals, because it
doesn't make sense to me to perform due diligence on 100's of stocks if I
can't find a low-risk entry point. If you break down WON's technical
requirements, it boils down to these essential ingredients:
The stock must be:
(1) outperforming the market (non-laggard RSRank).
(2) increasing it's rate of relative outperformance to the market (rising
RSLine).
(3) very near and preferably above it's long term average price performance
(very near or above the 200dMA)
(4) and either
(a) currently nearing the completion of a base ( in anticipating of a
breakout attempt above consolidation) or
(b) near a trend line denoting intermediate term support (such as the
50dMA, if considering a pullback entry)
With that in mind, it is far easier to spot stocks that are nearly ready for
action. Then and only then, narrow the list based on fundamental
characteristics (and industry if that is your preference). This approach
saves a boat load of time. Another reason for this approach is that
technicals always precede fundamental reporting. That is, technicals tell
you how the market *perceives* value in a stock, as the market is a forward
looking mechanism. Fundamental reporting lags. So, you can have technical
action that indicates that the forward look at fundamentals is confirming
what one might read from historical fundamental evaluation or indicating a
change for the better. At the same time, technicals will tell you when there
is a change in perception of the company for the worse. In other words, you
can have a stock with spiffy fundamentals that fit all the CANSLIM
requirements, but the technicals will tell you long before the accounting
that something is changing and that fundamentals are beginning to
deteriorate.
Katherine
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Hong Hsu
Sent: Thursday, July 10, 2003 3:23 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Second Guessing Myself - SFCC
>
>
>(1) price/chart action (Technicals first, always, and most important)
>(2) fundamentals (preponderance of evidence on the specifics as well as
>news, significant developments and more details as necessary)
>(3) group/industry health (only as a risk assessment factor)
>
>
>
Very interesting point. Katherine, Would you elaborate little bit here how
to employ TA first and fundies second. If fundies is not convincing while
TA is "perfect", do you still take it? An example of this is PWAV. The
chart is good and volume is also good, but earnings are not.
- -Hong
- -
- -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.
Next Article (by Date): [CANSLIM] How do you handle volatile Hong Hsu
Previous Article (by Date): Re: [CANSLIM] Re. ROE Spencer48@aol.com
Articles sorted by: [Date]
[Author]
[Subject]