Re: [CANSLIM] WEBX

From: "DMC197807" <dmc197807@comcast.net>
Subject: Re: [CANSLIM] WEBX
Date: Wed, 6 Aug 2003 08:47:38 -0700
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Top of Thread: Re: [CANSLIM] WEBX "Mark Crisp"
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P.S. [prescript]:  I can't see any reason to establish (or keep) a long
position on WEBX here.  Too much risk for me.

Mark,

Welcome to the thread.  I don't have any problem with you posting your
website location here; it looked pretty good to me.

On the subject of using canslim to find breakdown rather than breakout
candidates, I think that's a good idea.  I'm not sure how we properly tweak
the criteria, but I think it's an excellent topic for education here.  Why?
Because the M in Milscan is very, very precarious here and I think shorts
and puts are going to smash longs and calls over the next several weeks.  I
don't see a lot more upside to the market at this point.  Just pulling up an
SPX chart shows a very very tired market, and the path of least resistance
looks to be southeast-, and not northeastward bound.

With that in mind, how would be alter CANSLIM to look for breakdowns?  [I'll
put commentary in brackets for breakdown]

C = Current quarterly earnings per share (should show a major percentage
increase compared to the prior year's same quarter) [Here I think you take
all earnings up to, say 10% positive.  Why?  What we are looking for are
stocks which have risen with the tide in spite of lukewarm or poor earnings,
but earnings up to 30% seem too robust to produce a good short.]

A = Annual earnings (the company should be experiencing meaningful growth
over the past five years) [Perhaps the cap on annual earnings growth should
be 15%??]

N = New products, new management, new high prices [I don't see how to apply
this one; I don't want to exclude new high prices, because we're looking for
overvalued stocks.  Other ideas?]

S = Supply and demand (small capitalization stocks with high trading volume)
[Here, having large cap elephants could be a great idea

L = Leader in the industry, not a laggard [here, use a relative strength
rating of 60 or below?]

I = Institutional sponsorship (a little goes a long way) [Hmmmm.  Do we want
high institutional ownership, or is this factor one to be left out

M = Market direction (should be headed up).  [This one goes first.  For me,
the market is facing a lot more easy downside right here than upside.
Chances of a SPX in the 600, 700, 800 range in the next 3-4 months is much
greater, to me, than a SPX move to 1100, 1200, 1300.]

Now comes the difficulty of establishing a pivot, and selling at the
breakdown of that point.



DMC





- ----- Original Message -----
From: "Mark Crisp" <stressfreetrader@btopenworld.com>
To: <canslim@lists.xmission.com>
Sent: Wednesday, August 06, 2003 8:17 AM
Subject: Re: [CANSLIM] WEBX


> What about using CANSLIM in reverse to find shorting candidates?
>
>  I ran this scan on my filter and came up with some nice looking shorting
> candidates:
>
> 1 year low
> RS <30
> E.P.S. <30
> Price >$30
> Volume >250,000
> Cap. >2.0bn
>
>   Looking for poor fundamental stocks that are falling in price. Reverese
> CANSLIM if you like. Trade the breakouts.
>
>   What do you say?
>
>   Mark Crisp
>  http://www.stressfreetrading.com
>
> ----- Original Message -----
> From: "Jiehui" <ddloyilbshrb@iartdesign.com>
> To: <canslim@lists.xmission.com>
> Sent: Wednesday, August 06, 2003 5:42 AM
> Subject: [CANSLIM] WEBX
>
>
> > Hi all,
> >
> > I'm a beginner in this and is still a little unsure of how to read
charts.
> I hope some of the more experienced chart readers on this group can help
me.
> >
> > WEBX has formed the teacup w/ handle pattern and I mistakenly bought at
> the volume surge thinking it's a break-out, only to find it went down
5.68%
> >
> > Is it forming another handle now and should I continue holding on to the
> stock and wait for the handle to form or until the 8% stop-loss is
reached.
> Or should I exit my position now? Is this considered a failed break-out?
> >
> > The rating for this WEBX is currently: 97 81 73 A+ A A-
> >
> > Regards,
> > Jiehui
>
>
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