Re: Trailing stops and taking profits (was: RE: [CANSLIM] AAII letter to the ...

From: Hong Hsu <honghsu@bellatlantic.net>
Subject: Re: Trailing stops and taking profits (was: RE: [CANSLIM] AAII letter to the ...
Date: Thu, 17 Jul 2003 13:18:05 -0400

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   jans,    

Many thanks.    This group is great group, especially having several 
very experienced and knowledgeable peoples on board like you, Katherine  
and others.
   -Hong
 
   

Spencer48@aol.com wrote:

>Hong:
>
>     I just want to add two comments to Katherine's reply.  1) Comparitive RS 
>gives a history of how the stock is doing compared to the market.  The 
>strength of the stock as compared to the market can be seen in its graphic RS line.  
>     2) WON puts a lot of value in the comparitive RS line (it is featured on 
>his DGO graphs).  He has said in IBD before that the comparitive RS line can 
>give you a clue to the strength of a leading stock.  For instance, you have 2 
>leading stocks, one of which you are considering buying, and both are 
>beginning to consoidate.  "A" stock's RS line is consolidating along with the stock; 
>but "B"'s RS line is rising.  Choose to purchase the latter.
>
>jans
>
>
>
>In a message dated 7/16/2003 12:41:47 PM Eastern Daylight Time, 
>kmalm@earthlink.net writes:
>
><< Your question:
> "Isn't the Comparative RS just mimic price/volume action?  So it doesn't
> give any new info."
> 
> Answer:
> Absolutely not. First, the comparative RS does not consider volume, just
> price. The comparative RS calculation takes the stock's price on any one day
> and divides it by the value of the SPX (S&P500 index) on that same day. This
> is the reason why the RSLine (comparative RS) does not have a scale. This
> ratio is then viewed over time to see how this particular stock is doing
> against the market as a whole. For example, you can have a stock rising in
> price and still have a declining RSLine. Why? Because the stock is not
> rising as quickly as the market. Conversely, you can have  a stock falling
> in price and still have a rising RSLine. Why? Because the stock may be
> falling at a slower rate than the market is falling. This is a very powerful
> tool and I place far more importance on it than the RSRank itself, as it is
> not muddied by the weird behavior inherent in ranking systems. >>
>
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