Re: [CANSLIM] Re:stocks at the top

From: "DMC197807" <dmc197807@comcast.net>
Subject: Re: [CANSLIM] Re:stocks at the top
Date: Wed, 13 Aug 2003 09:28:18 -0700

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Rolf,

Very smart post, imo.  Remember the way to riches is to let the winners run
and cut the losers short.  It's not to lock in profits by selling a rising
stock which is correcting normally.  Weinstein has some things to say about
this.

I advised the original questioner to draw a trendline and see whether or not
the price action violated the trendline.   The trendline looks (jes'
eyeballing it) like it's at about 20 right now.  Maybe that's too much
profit to give back.

Another way to do it (Van Tharp) is to take the ATR and use a multiplier
(1.5 X or 2 X) and set your stop at that number with some adjustments for
round number activity.  Since ATR is 1.56 in PDII then it seems wise to set
the stop at somewhere between 2.50 and 3.00 below the highest closing price.
Since the highest closing looks to be about 26, then you could set the stop
at 23.46 or 22.96 (to avoid the round number bounces at 23.50 and 23.

Some smart speculator (Baruch, Keynes) said, in true trend following
fashion, I give up the first 20% and the last 20% of any gain to others, and
keep the middle 60% for myself.

DMC



- ----- Original Message -----
From: "Rolf Hertenstein" <rolfh@mindspring.com>
To: <canslim@lists.xmission.com>
Sent: Wednesday, August 13, 2003 9:13 AM
Subject: [CANSLIM] Re:stocks at the top (was short selling (WEBX) )


> Right *at* the top is trickier.  When I first read the question, I thought
> of, e.g., a Head & Shoulders Top, but by the time that formation is
> complete, it's already topped.  Climax tops are a possibility, but where
is
> *the* top as it's still going up?  I thought TASR for instance was likely
> done at the end of July after quickly running from $12 to $20.  But now it
> climaxed the climax to $25+.  Was yesterday finally *the* top, since it
did
> close well below the high on extremely high volume? Dunno.  Same for PDII.
> Most other technicals, like a quick slice down through the 50 DMA, are
> telling me that a top may have already happened.
>
> Generally, I watch the price/volume action for decelerating price rise,
> especially on higher volume, and especially if higher volume days are also
> down days, to warn that a top may be approaching.  This is also pretty
much
> the way I try to gauge the markets as a whole.  Nothing fancy.
>
> I'll be interested to hear other ideas.
>
>  Rolf
>
> ----- Original Message -----
> From: "Katherine Malm" <kmalm@earthlink.net>
>
>
> > Hi Harold (and all),
> >
> > Let's do this for the sake of discussion on the subject. Instead of me
> > simply listing how one (or I) would go about screening for failed tops,
> let
> > me ask of the group a preliminary question:
> >
> > What does a stock look like technically when it is *at* a top?
>
>
>
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