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

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Lessons Learned - 2 BO Failures Today
Date: Wed, 16 Jul 2003 13:24:07 -0500

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Hi Kelly,

Aside from the iffy fundamentals and/or handle patterns, how did you
determine stops? Worth examining that, as a stop which is set too tightly
for the stock's price/volume pattern and/or the market conditions will kick
you out unnecessarily. That's not to imply that being in the stocks was
right/wrong or that getting kicked out on a stop was right/wrong. But as
part of the trading package, can be very important. I often notice that
people get sidelined by swing trader talk and will set stops which are
inappropriate for intermediate term positions.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Bill Triffet
Sent: Wednesday, July 16, 2003 10:53 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Lessons Learned - 2 BO Failures Today


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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