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canslim-digest         Tuesday, June 22 1999         Volume 02 : Number 633



In this issue:

       [CANSLIM] Reesegroup list vs DGO list
       [CANSLIM] rolatzi's scan
       Re: [CANSLIM]  telecom stocks
       [CANSLIM] How securities transaction are done and signed in the US
       Re: [CANSLIM] rolatzi - compression day?
       Re: [CANSLIM] Re:OPTIONS:NONCANSLIM
       [CANSLIM] bREAKOUTS
       [CANSLIM] Connie! Help with Slow Sto- powi
       [CANSLIM] GNTX
       Re: [CANSLIM] bREAKOUTS
       Re: [CANSLIM] rolatzi - compression day?
       Re: [CANSLIM] bREAKOUTS
       Re: [CANSLIM] Connie! Help with Slow Sto- powi
       Re: [CANSLIM] Connie! Help with Slow Sto- powi
       [CANSLIM] RE: Jim's request for "doubling principle." [Connie Mack]

----------------------------------------------------------------------

Date: Mon, 21 Jun 1999 00:23:28 -0400
From: "Tom Worley" <[e-mail]>
Subject: [CANSLIM] Reesegroup list vs DGO list

Heard back from DGO tonight. My error (due the inefficiency
of the WordPerfect version I am running). The six stocks
(listed below) that showed on James' list that I said did
not show on the DGO list were, in fact, present on the DGO
list. These are:

> > LBFC - off hi 0%, RS 90, EPS 96
> > ABDR - off hi 5%, RS 89, EPS 97

> > MMCN - off hi 4%, RS 96, EPS 84
> > CMED - off hi 3%, RS 95, EPS 98
> > GNTX - off hi 1%, RS 94, EPS 96
> > FDS - off hi 4%, RS 93, EPS 98

Tom Worley
[e-mail]
chat with me at ICQ # 5568838
get ICQ software at http://www.icq.com/icqhomepage.html




- -

------------------------------

Date: Mon, 21 Jun 1999 06:23:48 -0400
From: [e-mail]
Subject: [CANSLIM] rolatzi's scan

> Date: Sun, 20 Jun 1999 17:09:20 +0200
> From: Johan Van Houtven <[e-mail]>
> Subject: Re: [CANSLIM] rolatzi - compression day?
>
> At 06:45 PM 6/18/99 -0400, you wrote:
> >rolatzi,
> >
> >Today would not qualify under your definition of a compression day, but
> >what do you think of today's action under HTMMIS definition that I
> >directed you to?
> >
> >Jeffry
>
> Jeffry,
>
> Since Friday was a triple witching day, I think, one should be carefull
> comparing the volume on such a day with the previous day.

Indeed.  Just commenting on the price and volume action within the
context of rolatzi's "compression" definition.  All but the Nas Comp
displayed what I would consider a form of compression.

> However, based on the !TYX and !VIX charts there is a good likelyhood the
> main market indices will either pauze or reverse [the (very) short term
> uptrend]. So, interpreting last Friday as a compression day will most
> probably be correct anyway. ;^)

Expiry is one of the few noises that I will consider, but the fact that
it "will most probably be correct anyway" perhaps make the point better
than anything I could say.

> BTW, glad you are back. The phrase "The silence of the lambs is over."
> keeps popping up in my head. Strange. B^)

Thanks for the greeting.  BTW, with your little white chocolates, do you
like fava beans?  ;)))
>
>
>
>
> Johan

Jeff

- -

------------------------------

Date: Mon, 21 Jun 1999 13:55:45 GMT
From: [e-mail] (Dan Musicant)
Subject: Re: [CANSLIM]  telecom stocks

On Sun, 20 Jun 1999 22:46:34 -0500, you wrote:

:Frank V. Wolynski wrote:
:>=20
:> WCOM is part of Telecomm Services. #15. A powerful group with lots of
:> leadership.
:> I have been constantly watching this group and Friday was a decent day=
 for
:> them. My surrogate made a new high on a bit more than average volume.
:> (Stocks listed below are only a portion of the entire surrogate.)
:
:Several stocks snipped...
:>=20
:> FRO - Strong - basing in handle?
:
:Anyone investigating FRO should know that they are being taken over
:by GBLX (or maybe QWST).   There are 2 bids on the table.   Could
:be interesting...
:
:Dave Cameron
:[e-mail]

Yes, this is very interesting. Qwest is having a conference call today,
and I think it is all about them trying to convince the powerful parties
that their bids for these two companies make the most sense.
Stockholders were not convinced last week when on a weak day the stock
fell around 30% or more. However, the CEO exuded a lot of confidence
after hours on that day (saw an interview), and I have a hunch that the
stock is in for a rebound. However, I still don't own any. Do your OWN
homework.

Dan

Dan


- -

------------------------------

Date: Mon, 21 Jun 1999 19:36:14 +0400
From: "Hrachouhi Keshish-Ghoukassian" <[e-mail]>
Subject: [CANSLIM] How securities transaction are done and signed in the US

Hi,

I've been registered a week ago, and have many ?s that i hope You'll
help me to solve them.

I am in Armenia which is in transitional stage of its economy, and we
are trying to create new rules working for our exchanges.And, at the
same time to formulate and establish new capital market.

Toward this end, we countinously encounter with different problems.
Right now we need to know how the transactions are done both in
Europian countries  and in US.

For eample in Armenia after executing a security trade, the brokers
pay $18.50 to the notary in order for the trade be sertified. And
this is done each time, when the same broker executes a trade
regardless of the volume.And this fact creates inconveniance among
them.

From this point of view, I would like to know the rules governing the
SECURITIES  TRANSACTION IN THE  US, and HOW THEY ARE SIGNED. AND  IN
THE CASE  OF ANY CHANGE   HOW THE  CHANGES ARE REFLECTED  BOTH IN THE
REGISTRATION  AND  DEPOSITORY .



On the other hand, I've learned that in some countries when trading a
security, the buyer and
the seller meet eachother without the presence of a broker.While
this is true in some countries, in other countries the brokers
participate in execution of a security trade.With this regard I would
like to know what is the difference from the commission point of
view. I mean if it is beneficial to trade without brokers'
participation, then why some countries choose to trade through
brokers.

Do they really not charge commission fee?

On the other hand. brokers' participation
help in price discovery. Thus how it can be understood why in some
countries brokers' participation is not necessary: just the buyer and
seller meet and execute the trade immediately and save the commission
fee?

Hence from this point of view, I would like YOU to help me in finding
the rules and regulations
thru which the transactions are generally done. Especially , I am
interested in knowing the  *** " SEC "   RULES  GOVERNING  THESE
TRANSACTIONS ***

If it is possible please let me know the exact web addrress ofthoses
rules . They may be not found in   SEC  ,  they may be in UCC or some
other regulations may exist.I donot know!!! OR YOU may not hesitate by
just writing me the full process or sending the appropriate file.

I'll be so thankfull to YOU in helping me to get this document.

Sincerely,
Hrachuhi
[e-mail]

- -

------------------------------

Date: Mon, 21 Jun 1999 22:09:39 +0200
From: Johan Van Houtven <[e-mail]>
Subject: Re: [CANSLIM] rolatzi - compression day?

At 05:09 PM 6/20/99 +0200, you wrote:
>Nevertheless the powers that be might produce a
>rally now and then sell the "news" at the end of the month.

Maybe the big boy know something about earning in the tech sector? ;^)

NAZ ended 1.8% from all time high.

CSCO, ASND, LU, MSFT, SUNW all acting well.





Johan






- -

------------------------------

Date: Mon, 21 Jun 1999 15:29:34 -0500
From: Dave Squires <[e-mail]>
Subject: Re: [CANSLIM] Re:OPTIONS:NONCANSLIM

Bittman has written an excellent book that will introduce you to the
nuances of index options. It's aptly named "Trading Index Options"

Good Luck,
DSquires

david lawson wrote:
>
>  Jeffry,
>
>   Can you recommend any books or websites that exlain index options and
> leeps.For instance you say your holding QQQ June 110 Puts.Are you
> referring to nasdaq 100 puts?If so,June 110PUT doesn't jive.Maybe you or
> someone else could explain LEEPS.Don't know if this has been mentioned
> before,sorry if it was.
>                         Thanks Ari
>
> [e-mail] wrote:
> >
> > > Tape is ugly, whipsaw prone.  Bullish sentiment is
> > > well over 60%,  and, worse, the percentage of
> > > bearish sentiment is now sneaking down towards 20%.
> > >
> > > My trading accounts are 100% cash until we get more
> > > of a shakeout.
> > >







> > > Welcome back.
> > >
> > > Walter
> >
> > Trusting sentiment a bit more these days, Walter?  What are the numbers
> > this week?
> >
> > Holding QQQ June 110 Puts.  Got a lead in 'em.  Looking for a flush 'em
> > out low here Monday or Tuesday to close out the puts and play some calls
> > from the potential double bottom off that 5/26 low.  That should have
> > the 'heads' babbling about a "W" formation to come, blah, blah, blah.
> > Could be a pretty good short term play up to the peak of the middle of
> > the "W" formation, and we'll see where the sentiment is at that point.
> > And, of course, watch for follow through days within the count.
> >
> > Trying not to play too far out, but this "M" is very much like Spring
> > '97.  Worth a look at the chart.  I'm going to look at the sentiment
> > chart for the period, at the moment.
> >
> > Jeffry
> >
> > -
>
> -

- -

------------------------------

Date: Mon, 21 Jun 1999 23:46:32 +0100
From: "Marc Laniado" <[e-mail]>
Subject: [CANSLIM] bREAKOUTS

There seem to be some moves on big volume Cisco, LU
What do people think of FDS breakout - handle was a little excessive, no?
Oste appears to have broken out
SEBL broke on volume today, but a little too hign
Good hunting!
Marc

Marc E Laniado
[e-mail]
Tel/Fax: [phone]
Mobile [phone]




- -

------------------------------

Date: Mon, 21 Jun 1999 20:51:25 -0400
From: "James Adams" <[e-mail]>
Subject: [CANSLIM] Connie! Help with Slow Sto- powi

Connie, or anyone else for that matter, I'm looking at a chart for powi.
the 5period %K = 94.98 and has stayed there for the past 3 trading days.
the 5 period %D = 71.51 and rising, as it has been for the past 3 trading
days.
With the lines about to converge at the top, does that signal a sell. I
guess the %K can
go to 100 but is has remained flat.
I guess what I'm asking is what is the slo sto saying to me?
Also the MACD indicated positive divergence today,how does that add to the
pcture.

Thanks
James Adams
[e-mail]
[e-mail]
Maysville, KY USA


- -

------------------------------

Date: Mon, 21 Jun 1999 20:54:18 -0400
From: "James Adams" <[e-mail]>
Subject: [CANSLIM] GNTX

Is 14 days too short of time span for a cup formation?
I vaguely remember someone posting earlier that O'Neil
is advocating 6-8 weeks as the optimal cup formation duration.

James Adams
[e-mail]
[e-mail]
Maysville, KY USA


- -

------------------------------

Date: Mon, 21 Jun 1999 21:07:20 -0400
From: Hugh Fader <[e-mail]>
Subject: Re: [CANSLIM] bREAKOUTS

SEBL's move is disappointing. I have been watching it for a while. It rose
above its pivot point on falling volume. Now it's too far extended to buy and
we get the high volume move.

FDS was a lesson for me. I bought while it was forming its handle in
anticipation of a breakout. Instead, it fell below its 50 day MA and I was
stopped out. The stock is still just barely a cup with handle based upon
middle of handle being above the middle of cup. I'm still watching and
waiting for a better base.

OSTE has the volume (just barely) but I think it needs to move above 40 or so
to be considered a breakout.

Based upon today's move I am considering a purchase of CSCO. The only thing
holding me back is that it is lagging its group. But this is a very strong
group so I'm not sure what to think. Does anybody else have an opinion on
this? If you have a very strong group where the top stocks have RS > 97, does
it make sense to relax the leadership rule that says buy from the top 5
stocks in the group?

Hugh

Marc Laniado wrote:

> There seem to be some moves on big volume Cisco, LU
> What do people think of FDS breakout - handle was a little excessive, no?
> Oste appears to have broken out
> SEBL broke on volume today, but a little too hign
> Good hunting!
> Marc
>
> Marc E Laniado
> [e-mail]
> Tel/Fax: [phone]
> Mobile [phone]
>
> -


- -

------------------------------

Date: Mon, 21 Jun 1999 21:23:38 -0400
From: "Tom Worley" <[e-mail]>
Subject: Re: [CANSLIM] rolatzi - compression day?

First call is estimating a 12.6% increase in Q2 overall
earnings compared to 1998.

Tom Worley
[e-mail]
chat with me at ICQ # 5568838
get ICQ software at http://www.icq.com/icqhomepage.html


- -----Original Message-----
From: Johan Van Houtven <[e-mail]>
To: [e-mail] <[e-mail]>
Date: Monday, June 21, 1999 4:09 PM
Subject: Re: [CANSLIM] rolatzi - compression day?

Maybe the big boy know something about earning in the tech
sector? ;^)

NAZ ended 1.8% from all time high.

CSCO, ASND, LU, MSFT, SUNW all acting well.

Johan






- -



- -

------------------------------

Date: Mon, 21 Jun 1999 18:31:23 -0700
From: Tim Fisher <[e-mail]>
Subject: Re: [CANSLIM] bREAKOUTS

If I had the cash I'd buy CSCO right now. Unfortunately I held onto the
internuts (non-CANSLIM!) and am just now coming back into profits on them.
For the very short term they look better than CSCO. You can almost hear the
corks popping on them.

Also take a look at HH. It's my first CANSLIM small cap purchase which
hasn't "acted up" in a long long time.

At 09:07 PM 6/21/99 -0400, you wrote:
>SEBL's move is disappointing. I have been watching it for a while. It rose
>above its pivot point on falling volume. Now it's too far extended to buy and
>we get the high volume move.
>
>FDS was a lesson for me. I bought while it was forming its handle in
>anticipation of a breakout. Instead, it fell below its 50 day MA and I was
>stopped out. The stock is still just barely a cup with handle based upon
>middle of handle being above the middle of cup. I'm still watching and
>waiting for a better base.
>
>OSTE has the volume (just barely) but I think it needs to move above 40 or so
>to be considered a breakout.
>
>Based upon today's move I am considering a purchase of CSCO. The only thing
>holding me back is that it is lagging its group. But this is a very strong
>group so I'm not sure what to think. Does anybody else have an opinion on
>this? If you have a very strong group where the top stocks have RS > 97, does
>it make sense to relax the leadership rule that says buy from the top 5
>stocks in the group?
>
>Hugh
>
>Marc Laniado wrote:
>
> > There seem to be some moves on big volume Cisco, LU
> > What do people think of FDS breakout - handle was a little excessive, no?
> > Oste appears to have broken out
> > SEBL broke on volume today, but a little too hign
> > Good hunting!
> > Marc
> >
> > Marc E Laniado
> > [e-mail]
> > Tel/Fax: [phone]
> > Mobile [phone]
> >
> > -
>
>
>-

Tim Fisher, 1995 President, Pacific Fishery Biologists
Ore-ROCK-On Rockhounding Web Site
PFB Information
mailto:[e-mail]
WWW http://OreRockOn.com

- -

------------------------------

Date: Mon, 21 Jun 1999 22:06:04 -0400
From: Connie Mack Rea <[e-mail]>
Subject: Re: [CANSLIM] Connie! Help with Slow Sto- powi

Evening Jim--

May I suggest that you don't weigh the SloSto so much.  I don't pay much
attention to it as a buy/sell signal.  A stochastics can reach what looks like
oversold or overbought and remain at aphotic depths or  stratospheric heights
for an extended time.

You  might take a moment and look at the construction of a stochastic; then
you'll see why the stochastic can remain at exaggerated levels.  One way to
get familiar with the stochastic is to look at a chart and try to infer what
the stochastic looks like.

I think you'll find that the 3/7/10 EMA and the MACD are better buy/sell
indicators.  And do not forget the doubling principle that applies to the
distance between the 3 EMA and the 7 EMA.  I have come to believe more and
more in the principle as I trade and invest.

Jim, I do not see a positive divergence for today.  In fact, I see a slight
negative divergence that began yesterday about 2:30 and continues through
today's close.  If you will draw a trend line across the tops of the MACD [I'm
using BigCharts], you'll see a declining line.

On a real short term outlook, I would be looking for a modest correction in
the next two days.  But, unless you are looking to exit a longer term
investment, I wouldn't sell.  POWI has a helluva powerful chart since that
triple bottom last year.

You might apply a 5/10/15 EMA for a less aggressive look.  It, too, will be
powerful and uninterrupted since the first of June.  POWI is an instance of
seeing what the 3/7/10 EMA can provide for an entry: as here, back in March.
It never gave a Second Level Sell since.  What a beautiful ride.

I look for a correction in the NASDAQ as soon as there is a doubling distance
between the 3 and 7 EMA; you can look at the MACD for a confirmation.  The
NASDAQ is so strong that one has to give it considerable latitude when
applying indicators.

Thanks for the mail.

Connie







James Adams wrote:

> Connie, or anyone else for that matter, I'm looking at a chart for powi.
> the 5period %K = 94.98 and has stayed there for the past 3 trading days.
> the 5 period %D = 71.51 and rising, as it has been for the past 3 trading
> days.
> With the lines about to converge at the top, does that signal a sell. I
> guess the %K can
> go to 100 but is has remained flat.
> I guess what I'm asking is what is the slo sto saying to me?
> Also the MACD indicated positive divergence today,how does that add to the
> pcture.
>
> Thanks
> James Adams
> [e-mail]
> [e-mail]
> Maysville, KY USA
>
> -




- -

------------------------------

Date: Mon, 21 Jun 1999 23:48:46 -0400
From: "James Adams" <[e-mail]>
Subject: Re: [CANSLIM] Connie! Help with Slow Sto- powi

Connie wrote:
> I think you'll find that the 3/7/10 EMA and the MACD are better buy/sell
> indicators.  And do not forget the doubling principle that applies to the
> distance between the 3 EMA and the 7 EMA.  I have come to believe more and
> more in the principle as I trade and invest.

Please say more about the doubling principle.

> Jim, I do not see a positive divergence for today.  In fact, I see a
slight
> negative divergence that began yesterday about 2:30 and continues through
> today's close.  If you will draw a trend line across the tops of the MACD
[I'm
> using BigCharts], you'll see a declining line.

As I look at  POWI the divergence bars seem to be growing larger, in
positive territory.
Quite possible that I'm not reading it correctly.

Thanks so much,
James Adams
[e-mail]
[e-mail]
Maysville, KY USA



- -

------------------------------

Date: Tue, 22 Jun 1999 08:11:53 -0400
From: Connie Mack Rea <[e-mail]>
Subject: [CANSLIM] RE: Jim's request for "doubling principle." [Connie Mack]

Connie wrote:
> I think you'll find that the 3/7/10 EMA and the MACD are better
buy/sell
> indicators.  And do not forget the doubling principle that applies to
the
> distance between the 3 EMA and the 7 EMA.  I have come to believe more
and
> more in the principle as I trade and invest.

Please say more about the doubling principle.
=======
[Jim, I'm speaking about DELL on 6-1 in the excerpt.]

One of the characteristics of my 3/7/10 EMA is that when the distance
between
the 3-EMA and 7-EMA is double, or greater than, the distance between the
7-EMA and the 10-EMA, there is  a growing implication that a reversal is
close at
hand.

This "doubling" principle applies to a declining or inclining price.
There is
no absolute and precise way to measure the "doubling."  Because the
3/7/10 EMA
is an extremely fast indicator, the separation is useful for trading (or

choosing an entry for investment).

The same principle works for a declining stock that is about to
reverse.  E.g.,
look at the last 30 minutes on the intraday chart [of DELL].  At about
3:30, there is a near "doubling" that results in flattening of price
rather than a reversal.  If
one wanted to hold for a clearer "doubling," that would be okay.  The
near
"doubling" would, therefore, just be a warning.  It is easy to back test
the
principle.

Much is arbitrary about selling the "doubling."  In a couple of
instances, I
have held through a "tripling" (as in SKYT a few days ago) when the
volume was incrementally and powerfully increasing a few days ago.  When
the volume slows, the time to leave is not far away.

>From my experience, it is less important what the chart scaling is than
the
"doubling" under that scale.  If you'll look at BigCharts, intraday,
you'll see
"doubling" at about 10:30.  It is also relevant, and confirmatory, that
the
"doubling" took place at a long term support level.  This conjunction of

"doubling," MACD buy, and long term support is a powerful conjunction
that
implies not only short term but long term significance.

One must believe in his indicators.  In this instance, there is, for me,
a most
powerful, and fortuitous, conjunction of indicators.  Not often is there
such a
conjunction.  However, powerful as the conjunction is, it appears in a
stock in
a strong down draft of price.  The stock is heavily oversold. Even so,
to enter
a position at this time may not be for the faint hearted.

Though the entry is speculative, it is at the same time--considering the

conjunction of indicators and support--a relatively low risk entry for
the
trader to take a profit out with very little risk.  For the investor,
the entry
is low risk, and holds the promise of a recovery in a sector much
maligned.




- -

------------------------------

End of canslim-digest V2 #633
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