RE: [CANSLIM] Implications and meaning of long-term resistance --> CAH

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Implications and meaning of long-term resistance --> CAH
Date: Thu, 24 Jul 2003 19:25:01 -0500

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Hi Kevin,

A long term chart will help give perspective to the overall action, but I
don't know that it would necessarily give you information on the odds of a
successful breakout. I think the action within the current base itself is
more telling.

Here's a 3 year weekly persepctive with comments:
http://www.breakoutwatch.com/katherine/CAH071803Wkly.JPG

The current pivot is significant because a break above here on volume would
break the longer term downtrend and would indicate CAH might be ready to
move up.

But, looking at the current base, there are some signs that the set up may
not be the strongest, meaning that the odds of a successful breakout would
tend to be lower.

http://www.breakoutwatch.com/katherine/CAH072403.JPG

My best guess is that if CAH is ready to move, it will first hang out in the
65-72 price zone for a while before staging a breakout, essentially
finishing off the right side of the base and forming a fresh handle. That
might give it time to see some volume build up on RHS of the base (now
missing) and also give CAH a chance to see it's RSLine rise and it's RSRank
move up to less laggard territory.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Krueger, Kevin
Sent: Thursday, July 24, 2003 3:43 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Implications and meaning of long-term resistance -->
CAH


Can anyone help explain what is happening from a technical perspective with
Cardinal Health (CAH).

In the 12-month time frame, there may be a cwh forming. In the 36-month time
frame, you can draw a horizontal line around $69  where there seems to be
historic and somewhat consistent price resistance. If a cwh formed (seen in
the 12-month time frame) and a subsequent breakout occurred at a pp of
68.06, do you think that there is higher likelihood of pullback because of
the long-term resistance? Should that information be considered in
evaluating the probability of success of the breakout?

Thanks,
Kevin

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