[CANSLIM] Price and volume

From: "Rolf Hertenstein" <rolfh@mindspring.com>
Subject: [CANSLIM] Price and volume
Date: Sat, 19 Jul 2003 07:01:09 -0600

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IDB's Investor's Corner lesson for Thurday, 17 July, wanted us "to =
simplify matters, focus on the key feature:  price action".  OK, fine.  =
(Note: since the Corner is available online to non-subscribers, I think =
I'm safe using direct quotes).

A bit further they state:
"Did the stock zoom higher in the morning but close the day near the =
bottom of its range while flashing a wide spread?  That shows selling by =
institutions"  And further on they note the case of EBAY late 2002/early =
2003, which for 3 weeks had weekly closing prices that varied by no more =
than 2.2% and state: "The tight action indicates accumulation by mutual =
funds".

Question: How can they make statements about institutional or mutal fund =
action without looking at the volume?  The article expressly ignores =
volume.  This makes no sense to me.  Any ideas?

 Rolf

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<DIV><FONT face=3DArial size=3D2>IDB's Investor's Corner lesson for =
Thurday, 17=20
July, wanted us "to simplify matters, focus on the key feature:&nbsp; =
price=20
action".&nbsp; OK, fine.&nbsp; (Note: since the Corner is available =
online to=20
non-subscribers, I think I'm safe using direct quotes).</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>A bit further they state:</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>"Did the stock zoom higher in the =
morning but close=20
the day near the bottom of its range while flashing a wide spread?&nbsp; =
That=20
shows selling by institutions"&nbsp; And further on they note the case =
of EBAY=20
late 2002/early 2003, which for 3 weeks had weekly closing prices that =
varied by=20
no more than 2.2% and state: "The tight action indicates accumulation by =
mutual=20
funds".</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>Question: How can they make statements =
about=20
institutional or mutal fund action without looking at the volume?&nbsp; =
The=20
article expressly ignores volume.&nbsp; This makes no sense to me.&nbsp; =
Any=20
ideas?</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>&nbsp;Rolf</FONT></DIV></BODY></HTML>

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