home
***
CD-ROM
|
disk
|
FTP
|
other
***
search
/
ftp.xmission.com
/
2014.06.ftp.xmission.com.tar
/
ftp.xmission.com
/
pub
/
lists
/
canslim
/
archive
/
v02.n3294
< prev
next >
Wrap
Internet Message Format
|
2003-05-06
|
48KB
From: owner-canslim-digest@lists.xmission.com (canslim-digest)
To: canslim-digest@lists.xmission.com
Subject: canslim-digest V2 #3294
Reply-To: canslim
Sender: owner-canslim-digest@lists.xmission.com
Errors-To: owner-canslim-digest@lists.xmission.com
Precedence: bulk
Content-Transfer-Encoding: quoted-printable
X-No-Archive: yes
canslim-digest Tuesday, May 6 2003 Volume 02 : Number 3294
In this issue:
[CANSLIM] RE:Handles (was:How much support is the 50 DMA? (JOSB))
----------------------------------------------------------------------
Date: Tue, 6 May 2003 21:58:57 -0500
From: "Katherine Malm" <kmalm@earthlink.net>
Subject: [CANSLIM] RE:Handles (was:How much support is the 50 DMA? (JOSB))
This is a multi-part message in MIME format.
- ------=_NextPart_000_0084_01C3141A.B177A7A0
Content-Type: text/plain;
charset="iso-8859-1"
Content-Transfer-Encoding: 8bit
Hi Roger,
An "ideal" handle will drift down on decreasing volume. WON considers this
drifting down to be one of the most important factors in a good handle. If there
is a shake out day or two on high volume *within* the handle, that's a good
thing, especially if the days end in the upper part of their range. (Plenty more
handle characteristics--see a more complete list at the end of this email ).
That said, it's honestly rare that you get "perfection" in a handle. My comment
on JOSB was that the lack of drift down and/or shakeout *within* the handle made
it a "poor quality" handle. That generally adds to your risk, but plenty of
breakouts occur from less than perfect bases and less than perfect handles. It's
all a matter of odds--just part of the decision process when determining whether
to take a breakout or not. My overall point on JOSB is that given the lack of
drift down in the handle, the risk of a pullback *after* breakout then
increases. That's essentially what happened. Buying late after a higher risk
breakout increases your odds of getting caught in a pullback.
Katherine ...handle info follows:
- ----- Original Message -----
From: Katherine Malm
To: canslim@lists.xmission.com
Sent: Friday, August 16, 2002 4:53 PM
Subject: [CANSLIM] Re: Handles, A list of Characteristics
HANDLES
General Requirements:
1. Handles most often begin to form lower than the left side of the base,
generally when the stock has climbed within 5-15% of the high.
2. The midpoint of a good handle should be higher than the midpoint of the base.
3. The handle should form in the upper half of the base.
4. The handle should form above the 200 day MA, but trade may often lull below
the 50 day MA.
5. The handle should drift sideways or lower. Upward "wedging" handles are
failure prone because the upwardly drifting price doesn't shake out the weak
holders, leaving the stock vulnerable to a correction. Wedging handles also make
pivots harder to spot. WON considers this the most important aspect of a handle
formation.
6. The handle should drift lower on light volume. This shows existing holders
are content to remain invested.
7. Within the handle, volatility should contract. The distance between price
highs and lows (intraday and day to day) should narrow. Avoid zigzagging or wide
and loose handles. Choppy handles carry more uncertainty.
8. In normal markets, proper handles correct 10-20%. In Bear markets, they can
correct as much as 30%. A handle that drifts <10% is fine as long as it is
drifting downward and meets other requirements.
9. The handle must be at least one week in length but can stretch as much as
7-10 weeks. It should be smaller in proportion to the size of the cup.
Special Considerations:
1. "High handles" can begin to form at prices higher than the left side of the
base. This is neither ideal nor common, but can still be successful as long as
the other handle requirements are met.
2. Be sure to look at both daily and weekly charts, as stocks with lengthy bases
will have long handles. The lengthy handle may appear as a base if looking at a
daily chart. Long bases signal strong support and are very strong patterns. (The
longer the base, the stronger the subsequent move.) Based on a study done by the
IBD in 96-97, small and mid cap stocks had 33 week bases on average. Large caps
had 66 week bases on average.
3. A stock can form a handle, near its pivot point and then begin forming
another handle. In this case, consider this to be one long handle.
4. "No-handle" bases are more error prone, but tend to work at the start of a
fresh rally, especially if the rally is strong. Look for volume to dry up as the
stock comes within 5-10% of its old peak. Stocks breaking out of bases without a
handle are most likely industry leaders; lead the market in relative price
performance, sales and earnings growth; and have high institutional sponsorship.
5. Double bottom bases can form a handle, though normally they do not do so.
[Note: These notes are compiled from many years worth of Investors' Corners,
HTMMIS, the IBD web site and other misc. sources.]
- --Katherine
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Roger Tawa
Sent: Tuesday, May 06, 2003 8:13 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] How much support is the 50 DMA? (JOSB)
Hi Katherine,
I have a question with regard to your ôpoorö handle comment. According to 24
lessons, page 47, a handle should drift down on lows *OR* have a shake out. In
this case, the shake out did happen on the two days after the pivot.
Furthermore, at the top of page 48, it says a proper handle will dry up near
its lows, which this one seems to do, *OR* will have several tight areas, which
this one also has.
Finally, the JOSB handle actually looks very much like the handle of Microsoft
shown in the example on page 46.
Now, being a novice at this, I would have looked at this handle and said
ôlooks goodö by the time april 1st came around.
Do you feel that the handle should drift down along its lows for the entire
duration of handle before it breaks out? Would you consider this a better
indication of a good handle than the other things? Thanks.
=================================================
Roger Tawa
http://tawacentral.net/
[One thing about paradigms: shift happens.]
[When you stop, you're done.]
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Tuesday, May 06, 2003 10:57 AM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] How much support is the 50 DMA? (JOSB)
Hi Chris,
I see several folks have already commented on the discipline of selling, so
thought I'd focus on a slightly different angle. That is, something I call
"wiggle room" or "the best selling rule is to buy right."
The biggest problem I see with your JOSB situation is that by buying late, you
took away all your wiggle room. JOSB set up with a pivot established 3/21 at
$25.51. It put in a poor handle which didn't drift down, indicating a possible
lack of shakeout, then staged a wimpy breakout on 4/2 (though it did show some
follow through action the next day). With those credentials, buying right is
particularly important. Odds favor, at minimum, a pullback at least to the
original breakout area around 25-26. Sure enough, that's what happened. As your
purchase was late, when the stock was already 13% extended from the breakout
price, you have no wiggle room to survive a pullback without triggering your 8%
rule. Notice that your original mental stop at $27 was above the logical support
area. See an annotated chart at:
http://www.cwhcharts.com/katherine/JOSB050603.JPG
These kinds of pullbacks are fairly common. BSTE did the same thing recently
and if purchased correctly, one could've sat out the minor correction without
triggering sell rules. Take a look at the reward:
http://www.cwhcharts.com/katherine/BSTE050603.JPG
Katherine
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Chris Jones
Sent: Monday, May 05, 2003 3:45 PM
To: CANSLIM
Subject: [CANSLIM] How much support is the 50 DMA? (JOSB)
I have a dilemma - I bought JOSB a few weeks back and put a mental stop in at
$27 (8%). When I checked today after the market closed, I saw it had dropped
$1.88, and is now at $25.51. I'm a little mad that I only placed a mental stop,
which could have avoided this, however I can't change that now. Normally I
would sell right at the market since my loss has now dropped to 12%, but the
stock now sits about $.25 above it's 50 DMA. Should I hang on and hope
institutions will step in? IBD says "many institutions view the 50-day line as
a level at which they can add to their positions at a reasonable price. That's
why many strong stocks find "support" at this line." However, it seems that the
50 DMA hasn't been too much of a support/resistance for JOSB in the past. I
hate to wait and hope, since that's exactly what O'Neil said bad investors do,
but the 50 DMA adds an interesting twist. Should I sell at the market, or wait
to see if it bounces back? Opinions are appreciated!
Thanks so much!
Chris
- ------=_NextPart_000_0084_01C3141A.B177A7A0
Content-Type: text/html;
charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML xmlns=3D"http://www.w3.org/TR/REC-html40" xmlns:v =3D=20
"urn:schemas-microsoft-com:vml" xmlns:o =3D=20
"urn:schemas-microsoft-com:office:office" xmlns:w =3D=20
"urn:schemas-microsoft-com:office:word"><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3DWord.Document name=3DProgId>
<META content=3D"MSHTML 6.00.2800.1126" name=3DGENERATOR>
<META content=3D"Microsoft Word 9" name=3DOriginator><LINK=20
href=3D"cid:filelist.xml@01C3141C.A0FF46B0" rel=3DFile-List><!--[if gte =
mso 9]><xml>
<o:OfficeDocumentSettings>
<o:DoNotRelyOnCSS/>
</o:OfficeDocumentSettings>
</xml><![endif]--><!--[if gte mso 9]><xml>
<w:WordDocument>
<w:Zoom>0</w:Zoom>
<w:DocumentKind>DocumentEmail</w:DocumentKind>
<w:EnvelopeVis/>
<w:DrawingGridHorizontalSpacing>9.35 =
pt</w:DrawingGridHorizontalSpacing>
<w:DrawingGridVerticalSpacing>9.35 pt</w:DrawingGridVerticalSpacing>
</w:WordDocument>
</xml><![endif]-->
<STYLE>@font-face {
font-family: Tahoma;
}
@page Section1 {size: 8.5in 11.0in; margin: 1.0in 1.25in 1.0in 1.25in; =
mso-header-margin: .5in; mso-footer-margin: .5in; mso-paper-source: 0; }
P.MsoNormal {
FONT-SIZE: 12pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: "Times New Roman"; =
mso-style-parent: ""; mso-pagination: widow-orphan; =
mso-fareast-font-family: "Times New Roman"
}
LI.MsoNormal {
FONT-SIZE: 12pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: "Times New Roman"; =
mso-style-parent: ""; mso-pagination: widow-orphan; =
mso-fareast-font-family: "Times New Roman"
}
DIV.MsoNormal {
FONT-SIZE: 12pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: "Times New Roman"; =
mso-style-parent: ""; mso-pagination: widow-orphan; =
mso-fareast-font-family: "Times New Roman"
}
A:link {
COLOR: blue; TEXT-DECORATION: underline; text-underline: single
}
SPAN.MsoHyperlink {
COLOR: blue; TEXT-DECORATION: underline; text-underline: single
}
A:visited {
COLOR: blue; TEXT-DECORATION: underline; text-underline: single
}
SPAN.MsoHyperlinkFollowed {
COLOR: blue; TEXT-DECORATION: underline; text-underline: single
}
P.MsoAutoSig {
FONT-SIZE: 12pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: "Times New Roman"; =
mso-pagination: widow-orphan; mso-fareast-font-family: "Times New Roman"
}
LI.MsoAutoSig {
FONT-SIZE: 12pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: "Times New Roman"; =
mso-pagination: widow-orphan; mso-fareast-font-family: "Times New Roman"
}
DIV.MsoAutoSig {
FONT-SIZE: 12pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: "Times New Roman"; =
mso-pagination: widow-orphan; mso-fareast-font-family: "Times New Roman"
}
SPAN.EmailStyle17 {
COLOR: navy; mso-style-type: personal-reply; mso-ansi-font-size: =
10.0pt; mso-ascii-font-family: Arial; mso-hansi-font-family: Arial; =
mso-bidi-font-family: Arial
}
SPAN.EmailStyle19 {
COLOR: navy; mso-style-type: personal; mso-ansi-font-size: 10.0pt; =
mso-ascii-font-family: Arial; mso-hansi-font-family: Arial; =
mso-bidi-font-family: Arial
}
DIV.Section1 {
page: Section1
}
</STYLE>
<!--[if gte mso 9]><xml>
<o:shapedefaults v:ext=3D"edit" spidmax=3D"1027"/>
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext=3D"edit">
<o:idmap v:ext=3D"edit" data=3D"1"/>
</o:shapelayout></xml><![endif]--></HEAD>
<BODY lang=3DEN-US style=3D"tab-interval: .5in" vLink=3Dblue link=3Dblue =
bgColor=3Dwhite>
<DIV><SPAN class=3D703544002-07052003>Hi Roger,</SPAN></DIV>
<DIV><SPAN class=3D703544002-07052003></SPAN> </DIV>
<DIV><SPAN class=3D703544002-07052003>An "ideal" handle will drift down =
on=20
decreasing volume. WON considers this drifting down to be one of the =
most=20
important factors in a good handle. If there is a shake out day or =
two on=20
high volume *within* the handle, that's a good thing, especially if the =
days end=20
in the upper part of their range. (Plenty more handle =
characteristics--see a=20
more complete list at the end of this email ).</SPAN></DIV>
<DIV><SPAN class=3D703544002-07052003></SPAN> </DIV>
<DIV><SPAN class=3D703544002-07052003>That said, it's honestly rare that =
you get=20
"perfection" in a handle. My comment on JOSB was that the lack of drift =
down=20
and/or shakeout *within* the handle made it a "poor quality" handle. =
That=20
generally adds to your risk, but plenty of breakouts occur from less =
than=20
perfect bases and less than perfect handles. It's all a matter of =
odds--just=20
part of the decision process when determining whether to take =
a=20
breakout or not. My overall point on JOSB is that given the lack of =
drift down=20
in the handle, the risk of a pullback *after* breakout then increases. =
That's=20
essentially what happened. Buying late after a higher risk breakout =
increases=20
your odds of getting caught in a pullback.</SPAN></DIV>
<DIV><SPAN class=3D703544002-07052003></SPAN> </DIV>
<DIV><SPAN=20
class=3D703544002-07052003>Katherine =
...handle=20
info follows:</SPAN></DIV>
<DIV><SPAN class=3D703544002-07052003></SPAN> </DIV>
<DIV><SPAN class=3D703544002-07052003>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">----- Original =
Message ----- </P>
<DIV=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 5pt; BACKGROUND: #e4e4e4; PADDING-BOTTOM: =
0in; BORDER-LEFT: black 2.25pt solid; PADDING-TOP: 0in; BORDER-BOTTOM: =
medium none">
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; MARGIN: 0in 0in 0pt =
5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; BORDER-BOTTOM: medium =
none; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto; =
mso-border-left-alt: solid black 2.25pt; mso-padding-alt: 0in 0in 0in =
5.0pt"><B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">From:</SPAN></B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> <A =
title=3Dkmalm@earthlink.net=20
href=3D"mailto:kmalm@earthlink.net">Katherine Malm</A> =
<o:p></o:p></SPAN></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent"><B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">To:</SPAN></B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> <A =
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
<o:p></o:p></SPAN></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent"><B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Sent:</SPAN></B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> Friday, August 16, 2002 =
4:53=20
PM<o:p></o:p></SPAN></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent"><B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Subject:</SPAN></B><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> [CANSLIM] Re: Handles, A =
list of=20
Characteristics<o:p></o:p></SPAN></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: =
transparent">HANDLES</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: =
transparent"><EM>General=20
Requirements:</EM></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">1.=20
Handles most often begin to form lower than the left side of the base, =
generally=20
when the stock has climbed within 5-15% of the high.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">2.=20
The midpoint of a good handle should be higher than the midpoint of the=20
base.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">3.=20
The handle should form in the upper half of the base.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">4.=20
The handle should form above the 200 day MA, but trade may often lull =
below the=20
50 day MA.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">5.=20
The handle should drift sideways or lower. Upward "wedging" handles are =
failure=20
prone because the upwardly drifting price doesn't shake out the weak =
holders,=20
leaving the stock vulnerable to a correction. Wedging handles also make =
pivots=20
harder to spot. <EM>WON considers this the most important aspect of a =
handle=20
formation.</EM></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">6.=20
The handle should drift lower on light volume. This shows existing =
holders are=20
content to remain invested.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">7.=20
Within the handle, volatility should contract. The distance between =
price highs=20
and lows (intraday and day to day) should narrow. Avoid zigzagging or =
wide and=20
loose handles. Choppy handles carry more uncertainty.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">8.=20
In normal markets, proper handles correct 10-20%. In Bear markets, they =
can=20
correct as much as 30%. A handle that drifts <10% is fine as long as =
it is=20
drifting downward and meets other requirements.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">9.=20
The handle must be at least one week in length but can stretch as much =
as 7-10=20
weeks. It should be smaller in proportion to the size of the cup.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent"> </P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: =
transparent"><EM>Special=20
Considerations:</EM></P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">1.=20
"High handles" can begin to form at prices higher than the left side of =
the=20
base. This is neither ideal nor common, but can still be successful as =
long as=20
the other handle requirements are met.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">2.=20
Be sure to look at both daily and weekly charts, as stocks with lengthy =
bases=20
will have long handles. The lengthy handle may appear as a base if =
looking at a=20
daily chart. Long bases signal strong support and are very strong =
patterns. (The=20
longer the base, the stronger the subsequent move.) Based on a study =
done by the=20
IBD in 96-97, small and mid cap stocks had 33 week bases on average. =
Large caps=20
had 66 week bases on average.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">3.=20
A stock can form a handle, near its pivot point and then begin forming =
another=20
handle. In this case, consider this to be one long handle.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">4.=20
"No-handle" bases are more error prone, but tend to work at the start of =
a fresh=20
rally, especially if the rally is strong. Look for volume to dry up as =
the stock=20
comes within 5-10% of its old peak. Stocks breaking out of bases without =
a=20
handle are most likely industry leaders; lead the market in relative =
price=20
performance, sales and earnings growth; and have high institutional=20
sponsorship.</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">5.=20
Double bottom bases can form a handle, though normally they do not do =
so. </P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent"> </P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent">[Note:=20
These notes are compiled from many years worth of Investors' Corners, =
HTMMIS,=20
the IBD web site and other misc. sources.]</P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: transparent"> </P>
<P class=3DMsoNormal=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 0in; BACKGROUND: white; PADDING-BOTTOM: 0in; =
MARGIN: 0in 0in 0pt 5pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; =
BORDER-BOTTOM: medium none; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto; mso-border-left-alt: solid black 2.25pt; =
mso-padding-alt: 0in 0in 0in 5.0pt; mso-shading: =
transparent">--Katherine</P></DIV>
<P class=3DMsoNormal=20
style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Roger=20
Tawa<BR><B>Sent:</B> Tuesday, May 06, 2003 8:13 PM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> RE: [CANSLIM] How much =
support=20
is the 50 DMA? (JOSB)<BR><BR></FONT></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">Hi=20
Katherine,<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">I have=20
a question with regard to your =93poor=94 handle comment.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>According to 24 lessons, =
page 47, a=20
handle should drift down on lows *<B><SPAN=20
style=3D"FONT-WEIGHT: bold">OR</SPAN></B>* have a shake out.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>In this case, the shake out =
did happen=20
on the two days after the pivot.<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">Furthermore,=20
at the top of page 48, it says a proper handle will dry up near its =
lows,=20
which this one seems to do, *<B><SPAN style=3D"FONT-WEIGHT: =
bold">OR</SPAN></B>*=20
will have several tight areas, which this one also=20
has.<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">Finally,=20
the JOSB handle actually looks very much like the handle of Microsoft =
shown in=20
the example on page 46.<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">Now,=20
being a novice at this, I would have looked at this handle and said =
=93looks=20
good=94 by the time april 1<SUP>st</SUP> came=20
around.<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle19><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">Do you=20
feel that the handle should drift down along its lows for the entire =
duration=20
of handle before it breaks out?<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>Would you consider this a better indication of a good handle =
than the=20
other things?<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>Thanks.<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle17><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"><![if =
!supportEmptyParas]><![endif]> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><!--[if supportFields]><span =
class=3DEmailStyle17><font=20
size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:10.0pt;mso-bidi-font-size:
12.0pt;font-family:Arial'><span =
style=3D'mso-element:field-begin'></span><span=20
style=3D"mso-spacerun: yes"> </span>AUTOTEXTLIST \s "E-mail=20
Signature" <span =
style=3D'mso-element:field-separator'></span></span></font></span><![endi=
f]--><FONT=20
color=3Dnavy><SPAN=20
style=3D"COLOR: =
navy">=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D</SPAN></FONT><FONT=20
color=3Dnavy><SPAN=20
style=3D"COLOR: navy; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3D"Times New Roman" color=3Dnavy =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: navy">Roger Tawa</SPAN></FONT><FONT=20
color=3Dnavy><SPAN=20
style=3D"COLOR: navy; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3D"Times New Roman" color=3Dnavy =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: =
navy">http://tawacentral.net/</SPAN></FONT><FONT=20
color=3Dnavy><SPAN=20
style=3D"COLOR: navy; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3D"Times New Roman" color=3Dnavy =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: navy">[One thing about paradigms: =
shift=20
happens.]</SPAN></FONT><FONT color=3Dnavy><SPAN=20
style=3D"COLOR: navy; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3D"Times New Roman" color=3Dnavy =
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: navy">[When you stop, you're=20
done.]</SPAN></FONT><FONT color=3Dnavy><SPAN=20
style=3D"COLOR: navy; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><!--[if supportFields]><span =
class=3DEmailStyle17><font=20
size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:10.0pt;mso-bidi-font-size:
12.0pt;font-family:Arial'><span =
style=3D'mso-element:field-end'></span></span></font></span><![endif]--><=
SPAN=20
class=3DEmailStyle17><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"><![if =
!supportEmptyParas]><![endif]> <o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DTahoma =
color=3Dblack=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: =
Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B><SPAN =
style=3D"FONT-WEIGHT: bold">On=20
Behalf Of </SPAN></B>Katherine Malm<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> Tuesday, May 06, 2003 =
10:57=20
AM<BR><B><SPAN style=3D"FONT-WEIGHT: bold">To:</SPAN></B>=20
canslim@lists.xmission.com<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> RE: [CANSLIM] How much =
support=20
is the 50 DMA? (JOSB)</SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt"><![if =
!supportEmptyParas]><![endif]> <o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black">Hi=20
Chris,</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">I =
see several=20
folks have already commented on the discipline of selling, so thought =
I'd=20
focus on a slightly different angle. That is, something I call "wiggle =
room"=20
or "the best selling rule is to buy right."</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black">The biggest=20
problem I see with your JOSB situation is that by buying late, you =
took away=20
all your wiggle room. JOSB set up with a pivot established 3/21 at =
$25.51. It=20
put in a poor handle which didn't drift down, indicating a possible =
lack of=20
shakeout, then staged a wimpy breakout on 4/2 (though it did show some =
follow=20
through action the next day). With those credentials, buying right is=20
particularly important. Odds favor, at minimum, a pullback at least to =
the=20
original breakout area around 25-26. Sure enough, that's what =
happened. As=20
your purchase was late, when the stock was already 13% extended from =
the=20
breakout price, you have no wiggle room to survive a pullback without=20
triggering your 8% rule. Notice that your original mental stop at $27 =
was=20
above the logical support area. See an annotated chart=20
at:</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black"><A=20
=
href=3D"http://www.cwhcharts.com/katherine/JOSB050603.JPG">http://www.cwh=
charts.com/katherine/JOSB050603.JPG</A></SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black">These kinds of=20
pullbacks are fairly common. BSTE did the same thing recently and if =
purchased=20
correctly, one could've sat out the minor correction without =
triggering sell=20
rules. Take a look at the reward:</SPAN></FONT><FONT =
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black"><A=20
=
href=3D"http://www.cwhcharts.com/katherine/BSTE050603.JPG">http://www.cwh=
charts.com/katherine/BSTE050603.JPG</A></SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">Katherine</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-BOTTOM: 12pt; MARGIN-LEFT: 1in; mso-margin-top-alt: =
auto"><FONT=20
face=3DTahoma color=3Dblack size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: =
Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B><SPAN =
style=3D"FONT-WEIGHT: bold">On=20
Behalf Of </SPAN></B>Chris Jones<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> Monday, May 05, 2003 3:45 =
PM<BR><B><SPAN style=3D"FONT-WEIGHT: bold">To:</SPAN></B> =
CANSLIM<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> [CANSLIM] How much =
support is=20
the 50 DMA? (JOSB)</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 1in; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto"><FONT=20
face=3DArial color=3Dblack size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: Arial">I have a =
dilemma - I=20
bought JOSB a few weeks back and put a mental stop in at $27 =
(8%). =20
When I checked today after the market closed, I saw it had dropped =
$1.88, and=20
is now at $25.51. I'm a little mad that I only placed a mental =
stop,=20
which could have avoided this, however I can't change that now. =
Normally=20
I would sell right at the market since my loss has now dropped to 12%, =
but the=20
stock now sits about $.25 above it's 50 DMA. Should I hang on =
and hope=20
institutions will step in? IBD says "many institutions view the =
50-day=20
line as a level at which they can add to their positions at a =
reasonable=20
price. That's why many strong stocks find "support" at this =
line." =20
However, it seems that the 50 DMA hasn't been too much of a =
support/resistance=20
for JOSB in the past. I hate to wait and hope, since that's =
exactly=20
what O'Neil said bad investors do, but the 50 DMA adds an =
interesting=20
twist. Should I sell at the market, or wait to see if it bounces =
back? Opinions are appreciated!</SPAN></FONT><FONT =
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 1in; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto"><FONT=20
face=3D"Times New Roman" color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 1in; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto"><FONT=20
face=3DArial color=3Dblack size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: Arial">Thanks so=20
much!</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 1in; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto"><FONT=20
face=3D"Times New Roman" color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black"> </SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal=20
style=3D"MARGIN-LEFT: 1in; mso-margin-top-alt: auto; =
mso-margin-bottom-alt: auto"><FONT=20
face=3DArial color=3Dblack size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: =
Arial">Chris</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P></DIV></BLOCKQUOTE></BODY></HTML=
>
- ------=_NextPart_000_0084_01C3141A.B177A7A0--
- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim". Do not use quotes in your email.
------------------------------
End of canslim-digest V2 #3294
******************************
To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com"
with "unsubscribe canslim-digest" in the body of the message.
For information on digests or retrieving files and old messages send
"help" to the same address. Do not use quotes in your message.