Re: [CANSLIM] Lessons Learned - 2 BO Failures Today

From: Bill Triffet <btriffet@earthlink.net>
Subject: Re: [CANSLIM] Lessons Learned - 2 BO Failures Today
Date: Wed, 16 Jul 2003 09:53:03 -0700 (PDT)
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Might I add the fundies on HUM were on the weak side for my taste. Handle was sloping up as well. 

Most of the recent BO's have had low fundies. Could be a sign?

- --
Bill

>>For the group:
 
I got stopped out today on two BO purchases: HUM and BSTE. I'll share my
"lessons learned" with the group so that hopefully someone will benefit from 
my loss:
 
I had done my usual due diligence on both stocks and had given them a
"green light with reservations". Turns out I should have given more credence to 
the "with reservations" part. Upon further examination, I see that high
institutional ownership and strange action in the handle are common in both
stocks as shown below:
 
HUM: 
Institutional Ownership = 68% 
Chart action = High volume in handle
 
BSTE: 
Institutional Ownership = 99%
Chart action = Wedging action in handle
 
High institutional ownership places an equity at the mercy of institutions 
who can sell of huge chunks at any given time and therefore put your
purchase in a free fall. High volume in the handle does not prove the sellers
are "drying up" to allow the stock to move upward. The wedging action in the
handle is a sell signal - a bad signal just before an expected breakout.
 
These are my observations from my post-mortem of these two purchases. If
anyone else sees additional items, or disagrees with my reasoning above, I'd 
love to hear your comments.<<

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<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>For the 
group:</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>I got stopped out 
today on&nbsp;two BO purchases: HUM and BSTE. I'll share my "lessons learned" 
with the group so that hopefully someone will benefit from my 
loss:</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>I had done my usual 
due diligence on both stocks and had given them a "green light with 
reservations". Turns out I should have given more credence to the "with 
reservations" part. Upon further examination, I see that high institutional 
ownership and strange action in the handle are common in both stocks as shown 
below:</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>HUM: 
</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>Institutional 
Ownership = 68% </FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>Chart action = High 
volume in handle</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>BSTE: 
</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>Institutional 
Ownership = 99%</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>Chart action = 
Wedging action in handle</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>High institutional 
ownership places an equity at the mercy of institutions who can sell of huge 
chunks at any given time and therefore put your purchase in a free fall. High 
volume in the handle does not prove the sellers are "drying up" to allow the 
stock to move upward. The wedging action in the handle is a sell signal - a bad 
signal just before an expected breakout.</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial size=2>These are my 
observations from my post-mortem of these two purchases. If anyone else sees 
additional items, or disagrees with my reasoning above, I'd love to hear your 
comments.</FONT></SPAN></DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=713304115-16072003><FONT face=Arial 
size=2>Kelly</FONT></SPAN></DIV></BODY></HTML>

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