From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2817 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 Friday, August 16 2002 Volume 02 : Number 2817 In this issue: Re: [CANSLIM] stop losses and profits [CANSLIM] Re: Handles, A list of Characteristics (was: CVH handle) Re: [CANSLIM] stop losses and profits ---------------------------------------------------------------------- Date: Fri, 16 Aug 2002 16:31:14 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] stop losses and profits This is a multi-part message in MIME format. - ------=_NextPart_000_0132_01C24542.56B7A830 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Nancy, Let me be more general in this response. Don't worry about counting = bases when making sell decisions. Sell rules are primarily based on = price/volume action, not which base the stock is in. Base counting is of = only minor significance in the grand scheme of things and is most useful = in deciding whether or not to buy a breakout from a 3rd or 4th stage = base. All in all, I'd place it just about last in "things to consider = when buying." Sell rules are relatively complex. The first and foremost is, never let = a stock drop more than 8% below your buy price. Beyond that, rules are = relatively numerous and often open to interpretation. More than = anything, if it's a strong Bull market and you've managed to hold = through a series of bases, then your final decision to exit will depend = on your overall goals and your interpretation of the chart. Katherine ----- Original Message -----=20 From: NANCY POLCARO=20 To: canslim=20 Sent: Friday, August 16, 2002 4:10 PM Subject: Re: [CANSLIM] stop losses and profits Katherine-here are my other questions-1) a new stage base is one of = the bases(side movement ) between the 1 or 4 healthy rises( uptrends) in = a stock, while starting to count bases over again is done when a stock = breaks down and dips below the low point of the previous base. 2)If a = stock breaks down after the 3rd or 4th rise and must undercut the = previous low to restart base count would someone like me a)let it drop = to your buy point b)let it drop 8% below c)let it drop to undercut the = low of the previous base d) don't buy in on the 3rd or 4th base or rise = because it may fail. 3) The difference in your response seems to be = the lenght of time it took the stock to rise. My thinking is that a = stock that shoots up quickly will have profit taking and if it is = healthy will turn up again( kind of like the handle in CWH) while a = stock that takes 6 weeks to rise should be stronger by then and if it = falls it probably never was a strong stock.( leaving out horrible days = in the market when all falls.) Please excuse my ignorance but the only = way I know if I am progressing is to see how much I am missing. Thanks = again-I know you are a busy person Nancy ----- Original Message ----- From: Katherine Malm Sent: Friday, August 16, 2002 12:32 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] stop losses and profits Hi Nancy, Let me try and clear up some of your confusion: 1. A stock's "rise" does not occur *in* a base, but *between* bases. = While the price will fluctuate up and down within the base itself, the = amount of fluctuation will vary depending on the severity of correction and = the time it takes to form the area of consolidation. The stock is essentially *absorbing* the gains of its previous advance. 2. When you purchase a stock, you will always purchase it as it = *breaks out* of that base. This preferred buy point is referred to as the "pivot" = and is again defined by the pattern that the base forms. 4. When a stock begins a healthy rising pattern after it breaks out, = it can rise *any* amount before it consolidates (bases) again. There is no = hard and fast rule as to how much it will rise before basing, though WON = suggests that if it is >=3D25%, the next base would then be considered a "new = stage base." This is only important in that his studies show that most = stocks can't muster the oomph to keep going after they've reached the 3rd = or 4th stage base. 3. Mike's question about a sell rule is not dependent on *which* = base in the base count we are evaluating. A base is a base. If the stock breaks = out as it should and begins to rise, how are you going to handle selling it = when/if the time comes? 4. WON suggests that, if you buy correctly at the pivot (or no more = than 5% above it), that you should never have to suffer a loss of more than = 8%. This is because, in his studies, he has found that a healthy stock never = falls more than 8% below the pivot before continuing a healthy advance. 5. Mike's question, specifically, was "if a stock breaks out of a = base, then rises 10-15%, then falls back, where do you place your sell stop? 8% = below your buy price or something other than that?" In other words, should = you be willing to accept *any* loss if a stock has managed to rise 10-15% = in 6 wks, then falls back to where you bought it. My vote is, if it takes 6 = wks to rise and then erases the entire advance, I don't want to take an 8% = loss. If it rose 10-15% in *one* week and then fell back on low volume, I'd = look at that as "normal" and might consider it a second chance to *buy* = more. Katherine ----- Original Message ----- From: "NANCY POLCARO" To: Sent: Friday, August 16, 2002 1:47 PM Subject: Re: [CANSLIM] stop losses and profits | Katherine-let me see if I am following correctly please. My = question is | that previously I understood that after the third rise in a base = formation a | stock may correct by dropping below the previous base and then = starting up | again if all is well with the stock. Then the bases start to be = recounted | again. In this case, if you just bought in during the third rise = in the | base, which from my understanding would probably go up between = 15%(Mikes | figure) and 25%( the amount of each rise in a base of a healthy = stock) you | would sell(not you personally but someone with my amount of = experience or | the like) before the 8% drop, to protect your gain. Then follow = the stock | and watch for a buy in again at some point depending on how the = stock acts | from this point on? Is that close to correct ??? Thanks for your thoughts | Nancy | | | >From: "Katherine Malm" | >Reply-To: canslim@lists.xmission.com | >To: | >Subject: Re: [CANSLIM] stop losses and profits | >Date: Fri, 16 Aug 2002 13:09:30 -0500 | > | >HI Mike, | > | >I think you'll get a hundred different answers on this one, so = I'll just | >answer from my personal point of view. | > | >If a stock breaks out of a well-formed base on volume, then takes = 6 weeks | >to | >rise 10 or 15 percent, then I sure wouldn't want to risk 8% loss = at that | >point, even if it were falling back "normally" as you suggest. To = me that | >means that no sell signals were triggered on the way up, and that = the | >general pattern included up days on higher volume than down days, = support | >at | >the 50 day moving average, etc. My personal preference, however, = would be | >to | >move my stop to breakeven or slightly below (3-4% max, depending = on market | >conditions) if the stock had risen like this. | > | >Katherine | > | > | >----- Original Message ----- | >From: | >To: | >Sent: Friday, August 16, 2002 9:17 AM | >Subject: [CANSLIM] stop losses and profits | > | > | >| Group, | >| | >| In reading WON, he makes a statement that you should never let = a stock in | >| which you are up 10-15% turn into a loss, but I was wondering = you have | >| interpreted that along with the sell at no more than an 8% loss = rule. | >| | >| Say you buy a stock, at a breakout, and it rises 10-15% over a = few (6+ | >| weeks), and then is started to correct....Do you sell at you = break even | >| point, or do you allow it to go to your 8% loss point before = selling? | >This | >| is assuming that the stock is NOT giving any strong sell = signals, but | >| appears to be pulling back "normally". | >| | >| Thanks | >| | >| Mike Niemotka , PE | >| Sr. Principal Engineer | >| Baxter Healthcare Corporation | >| Route 120 & Wilson Road | >| Round Lake, IL 60073 | >| Tel (847) 270-4075 | >| Fax (847) 270-4525 | >| michael_niemotka@baxter.com | >| | >| | >| | >| - | >| -To subscribe/unsubscribe, email "majordomo@xmission.com" | >| -In the email body, write "subscribe canslim" or | >| -"unsubscribe canslim". Do not use quotes in your email. | > | > | >- | >-To subscribe/unsubscribe, email "majordomo@xmission.com" | >-In the email body, write "subscribe canslim" or | >-"unsubscribe canslim". Do not use quotes in your email. | | | | | _________________________________________________________________ | Send and receive Hotmail on your mobile device: = http://mobile.msn.com | | | - | -To subscribe/unsubscribe, email "majordomo@xmission.com" | -In the email body, write "subscribe canslim" or | -"unsubscribe canslim". Do not use quotes in your email. - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_0132_01C24542.56B7A830 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Nancy,
 
Let me be more general in = this=20 response. Don't worry about counting bases when making sell decisions. = Sell=20 rules are primarily based on price/volume action, not which base the = stock is=20 in. Base counting is of only minor significance in the grand scheme of = things=20 and is most useful in deciding whether or not to buy a breakout from a = 3rd or=20 4th stage base. All in all, I'd place it just about last in  = "things to=20 consider when buying."
 
Sell rules are relatively = complex. The=20 first and foremost is, never let a stock drop more than 8% below your = buy price.=20 Beyond that, rules are relatively numerous and often open to = interpretation.=20 More than anything, if it's a strong Bull market and you've managed to = hold=20 through a series of bases, then your final decision to exit will depend = on your=20 overall goals and your interpretation of the chart.
 
Katherine
----- Original Message -----
From:=20 NANCY = POLCARO=20
To: canslim
Sent: Friday, August 16, 2002 = 4:10=20 PM
Subject: Re: [CANSLIM] stop = losses and=20 profits

Katherine-here are my other questions-1) a new stage base is = one of=20 the bases(side movement ) between the 1 or 4 healthy rises( = uptrends) in=20 a stock, while starting to count bases over again is done when a stock = breaks=20 down and dips below the low point of the previous base.  2)If a = stock=20 breaks down after the 3rd or 4th rise and must undercut the = previous low=20 to restart base count would someone like me a)let it drop to your buy = point=20 b)let it drop 8% below c)let it drop to undercut the low of the = previous=20 base d) don't buy in on the 3rd or 4th base or rise because it may=20 fail.    3) The difference in your response seems to be = the=20 lenght of time it took the stock to rise.  My thinking is that a = stock=20 that shoots up quickly will have profit taking  and if it is = healthy will=20 turn up again( kind of like the handle in CWH)  while a stock = that takes=20 6 weeks to rise should be stronger by then and if it falls it probably = never=20 was a strong stock.( leaving out horrible days in the market when all = falls.)=20 Please excuse my ignorance but the only way I know if I am progressing = is to=20 see how much I am missing.  Thanks again-I know you are a busy=20 person  Nancy
 
----- Original Message -----
From:=20 Katherine Malm
Sent: Friday, August 16, 2002 = 12:32=20 PM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] stop = losses and=20 profits
 
Hi Nancy,

Let me try and clear up some of = your=20 confusion:

1. A stock's "rise" does not occur *in* a base, = but=20 *between* bases. While
the price will fluctuate up and down = within the=20 base itself, the amount of
fluctuation will vary depending on the = severity of correction and the time
it takes to form the area of=20 consolidation. The stock is essentially
*absorbing* the gains of = its=20 previous advance.

2. When you purchase a stock, you will = always=20 purchase it as it *breaks out*
of that base. This preferred buy = point is=20 referred to as the "pivot" and is
again defined by the pattern = that the=20 base forms.

4. When a stock begins a healthy rising pattern = after it=20 breaks out, it can
rise *any* amount before it consolidates = (bases)=20 again. There is no hard and
fast rule as to how much it will rise = before=20 basing, though WON suggests
that if it is >=3D25%, the next = base would=20 then be considered a "new stage
base." This is only important in = that his=20 studies show that most stocks
can't muster the oomph to keep = going after=20 they've reached the 3rd or 4th
stage base.

3. Mike's = question=20 about a sell rule is not dependent on *which* base in the
base = count we=20 are evaluating. A base is a base. If the stock breaks out as
it = should=20 and begins to rise, how are you going to handle selling it = when/if
the=20 time comes?

4. WON suggests that, if you buy correctly at the = pivot=20 (or no more than 5%
above it), that you should never have to = suffer a=20 loss of more than 8%. This
is because, in his studies, he has = found that=20 a healthy stock never falls
more than 8% below the pivot before=20 continuing a healthy advance.

5. Mike's question, = specifically, was=20 "if a stock breaks out of a base, then
rises 10-15%, then falls = back,=20 where do you place your sell stop? 8% below
your buy price or = something=20 other than that?" In other words, should you be
willing to accept = *any*=20 loss if a stock has managed to rise 10-15% in 6 wks,
then falls = back to=20 where you bought it. My vote is, if it takes 6 wks to
rise and = then=20 erases the entire advance, I don't want to take an 8% loss. If
it = rose=20 10-15% in *one* week and then fell back on low volume, I'd look = at
that=20 as "normal" and might consider it a second chance to *buy*=20 more.

Katherine


----- Original Message = - -----
From:=20 "NANCY POLCARO" <zillagirl@msn.com>
To:=20 <canslim@lists.xmission.com>
Sent: Friday, August 16, 2002 = 1:47=20 PM
Subject: Re: [CANSLIM] stop losses and profits


|=20 Katherine-let me see if I am following correctly please.  My = question=20 is
| that previously I understood that after the third rise in a = base=20 formation
a
| stock may correct by dropping below the previous = base=20 and then starting up
| again if all is well with the stock.  = Then=20 the bases start to be recounted
| again.  In this case, if = you just=20 bought in during the third rise in the
| base, which from my=20 understanding would probably go up between 15%(Mikes
| figure) = and 25%(=20 the amount of each rise in a base of a healthy stock) you
| would = sell(not you personally but someone with my amount of experience = or
| the=20 like) before the 8% drop, to protect your gain.  Then follow = the=20 stock
| and watch for a buy in again at some point depending on = how the=20 stock acts
| from this point on?  Is that close to correct = ??? =20 Thanks for your
thoughts
| Nancy
|
|
| >From: = "Katherine=20 Malm" <kmalm@earthlink.net>
| >Reply-To:=20 canslim@lists.xmission.com
| >To:=20 <canslim@lists.xmission.com>
| >Subject: Re: [CANSLIM] = stop=20 losses and profits
| >Date: Fri, 16 Aug 2002 13:09:30 = - -0500
|=20 >
| >HI Mike,
| >
| >I think you'll get a = hundred=20 different answers on this one, so I'll just
| >answer from my = personal=20 point of view.
| >
| >If a stock breaks out of a = well-formed=20 base on volume, then takes 6 weeks
| >to
| >rise 10 or = 15=20 percent, then I sure wouldn't want to risk 8% loss at that
| = >point,=20 even if it were falling back "normally" as you suggest. To me = that
|=20 >means that no sell signals were triggered on the way up, and = that=20 the
| >general pattern included up days on higher volume than = down=20 days, support
| >at
| >the 50 day moving average, etc. = My=20 personal preference, however, would be
| >to
| >move my = stop to=20 breakeven or slightly below (3-4% max, depending on
market
|=20 >conditions) if the stock had risen like this.
| >
|=20 >Katherine
| >
| >
| >----- Original Message = - -----
|=20 >From: <michael_niemotka@baxter.com>
| >To:=20 <canslim@lists.xmission.com>
| >Sent: Friday, August 16, = 2002=20 9:17 AM
| >Subject: [CANSLIM] stop losses and profits
| = >
|=20 >
| >| Group,
| >|
| >| In reading WON, he = makes a=20 statement that you should never let a stock
in
| >| which = you are=20 up 10-15% turn into a loss, but I was wondering you have
| >|=20 interpreted that along with the sell at no more than an 8% loss = rule.
|=20 >|
| >| Say you buy a stock, at a breakout, and it rises = 10-15%=20 over a few (6+
| >| weeks), and then is started to = correct....Do you=20 sell at you break even
| >| point, or do you allow it to go to = your 8%=20 loss point before selling?
| >This
| >| is assuming that = the=20 stock is NOT giving any strong sell signals, but
| >| appears = to be=20 pulling back "normally".
| >|
| >| Thanks
| = >|
| >|=20 Mike Niemotka , PE
| >| Sr. Principal Engineer
| >| = Baxter=20 Healthcare Corporation
| >| Route 120 & Wilson Road
| = >|=20 Round Lake, IL 60073
| >| Tel (847) 270-4075
| >| Fax = (847)=20 270-4525
| >| michael_niemotka@baxter.com
| >|
| = >|
|=20 >|
| >| -
| >| -To subscribe/unsubscribe, email=20 "majordomo@xmission.com"
| >| -In the email body, write = "subscribe=20 canslim" or
| >| -"unsubscribe canslim".  Do not use = quotes in=20 your email.
| >
| >
| >-
| >-To=20 subscribe/unsubscribe, email "majordomo@xmission.com"
| >-In = the email=20 body, write "subscribe canslim" or
| >-"unsubscribe = canslim".  Do=20 not use quotes in your email.
|
|
|
|
|=20 = _________________________________________________________________
| = Send=20 and receive Hotmail on your mobile device:=20 http://mobile.msn.com
|
|
| -
| -To = subscribe/unsubscribe, email=20 "majordomo@xmission.com"
| -In the email body, write "subscribe = canslim"=20 or
| -"unsubscribe canslim".  Do not use quotes in your=20 email.


-
-To subscribe/unsubscribe, email=20 "majordomo@xmission.com"
-In the email body, write "subscribe = canslim"=20 or
-"unsubscribe canslim".  Do not use quotes in your=20 email.
- ------=_NextPart_000_0132_01C24542.56B7A830-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 16 Aug 2002 16:53:54 -0500 From: "Katherine Malm" Subject: [CANSLIM] Re: Handles, A list of Characteristics (was: CVH handle) This is a multi-part message in MIME format. - ------=_NextPart_000_0144_01C24545.812041B0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Norm, Yes, I did make note of the minimum 1 wk handle length in my handwritten = notes. I may as well post this summary that I made of handles from my = own notes to go with it: 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.=20 [Note: These notes are compiled from many years worth of Investors' = Corners, HTMMIS, the IBD web site and other misc. sources.] - --Katherine - ----- Original Message -----=20 From: "Boyd" To: Sent: Friday, August 16, 2002 3:05 PM Subject: Re: [CANSLIM] CVH handle | If memory serves me correctly, 1 week is long enuf. I think maybe I = saw | this also on Katherine's hand-sketched charts?? If not, nevermind:-) |=20 | Norm |=20 |=20 | Hermann Ertl writes: |=20 | > > From: "Tom Worley" | > > Date: Thu, 15 Aug 2002 00:57:00 -0400 | > > | > > pattern is too short (one week) to start calling this a handle. | >=20 | >=20 | >=20 | >=20 | > What is the minimum length of a handle? | >=20 | >=20 | >=20 | >=20 | >=20 | > - | > -To subscribe/unsubscribe, email "majordomo@xmission.com" | > -In the email body, write "subscribe canslim" or | > -"unsubscribe canslim". Do not use quotes in your email. | >=20 |=20 | - | -To subscribe/unsubscribe, email "majordomo@xmission.com" | -In the email body, write "subscribe canslim" or | -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_0144_01C24545.812041B0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Norm,
 
Yes, I did make note of the minimum 1 wk handle length in my = handwritten=20 notes. I may as well post this summary that I made of handles from my = own notes=20 to go with it:
 
HANDLES
General Requirements:
1. Handles most often begin to form lower than the left side of the = base,=20 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=20 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=20 below the 50 day MA.
5. The handle should drift sideways or lower. Upward "wedging" = handles are=20 failure prone because the upwardly drifting price doesn't shake out the = weak=20 holders, leaving the stock vulnerable to a correction. Wedging handles = also make=20 pivots harder to spot. WON considers this the most important aspect = of a=20 handle formation.
6. The handle should drift lower on light volume. This shows = existing=20 holders are content to remain invested.
7. Within the handle, volatility should contract. The distance = between=20 price highs and lows (intraday and day to day) should narrow. Avoid = zigzagging=20 or wide and loose handles. Choppy handles carry more uncertainty.
8. In normal markets, proper handles correct 10-20%. In Bear = markets, they=20 can correct as much as 30%. A handle that drifts <10% is fine as long = as it=20 is drifting downward and meets other requirements.
9. The handle must be at least one week in length but can stretch = as much=20 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=20 the base. This is neither ideal nor common, but can still be successful = as long=20 as the other handle requirements are met.
2. Be sure to look at both daily and weekly charts, as stocks with = lengthy=20 bases will have long handles. The lengthy handle may appear as a base if = looking=20 at a daily chart. Long bases signal strong support and are very strong = patterns.=20 (The longer the base, the stronger the subsequent move.) Based on a = study done=20 by the IBD in 96-97, small and mid cap stocks had 33 week bases on = average.=20 Large caps had 66 week bases on average.
3. A stock can form a handle, near its pivot point and then begin = forming=20 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=20 a fresh rally, especially if the rally is strong. Look for volume to dry = up as=20 the stock comes within 5-10% of its old peak. Stocks breaking out of = bases=20 without a handle are most likely industry leaders; lead the market in = relative=20 price performance, sales and earnings growth; and have high = institutional=20 sponsorship.
5. Double bottom bases can form a handle, though normally they do = not do=20 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 -----=20
From: "Boyd" <theboyd@tisd.net>
To: <canslim@lists.xmission.com= >
Sent: Friday, August 16, 2002 3:05 PM
Subject: Re: [CANSLIM] CVH handle

| If memory serves me correctly, 1 week is long = enuf.  I=20 think maybe I saw
| this also on Katherine's hand-sketched = charts??  If=20 not, nevermind:-)
|
| Norm
|
|
| Hermann Ertl = writes:
|=20
| > > From: "Tom Worley" <stkguru@bellsouth.net>
| = > >=20 Date: Thu, 15 Aug 2002 00:57:00 -0400
| > >
| > > = pattern is=20 too short (one week) to start calling this a handle.
| >
| = >
|=20 >
| >
| > What is the minimum length of a handle?
| = >=20
| >
| >
| >
| >
| > -
| > -To=20 subscribe/unsubscribe, email "majordomo@xmission.com"
| = > -In=20 the email body, write "subscribe canslim" or
| > -"unsubscribe=20 canslim".  Do not use quotes in your email.
| >
|
| = - -
|=20 - -To subscribe/unsubscribe, email "majordomo@xmission.com"
| = - -In the=20 email body, write "subscribe canslim" or
| -"unsubscribe = canslim".  Do=20 not use quotes in your email. - ------=_NextPart_000_0144_01C24545.812041B0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 16 Aug 2002 16:55:25 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] stop losses and profits Hi Mike, 8% standard stop loss, though I don't see this happen too often when the market is healthy. Katherine - ----- Original Message ----- From: To: Sent: Friday, August 16, 2002 2:54 PM Subject: Re: [CANSLIM] stop losses and profits | | Katherine, | | I knew I could count on you for a good answer. As a follow up to your | answer #4, if you made 10-15% in one week, how low would you allow the | stock to drop on low volume and still buy more, as opposed to selling out? | | Put another way, if it ran up 15% in a week, would you allow it to go below | your original buy point, even if it was at low volume? | | | Have a great weekend everyone! | | Mike | | Mike Niemotka , PE | Sr. Principal Engineer | Baxter Healthcare Corporation | Route 120 & Wilson Road | Round Lake, IL 60073 | Tel (847) 270-4075 | Fax (847) 270-4525 | michael_niemotka@baxter.com | | | | "Katherine Malm" | To: canslim@lists.xmission.com | Sent by: cc: | owner-canslim@lists.xm Subject: Re: [CANSLIM] stop losses and profits | ission.com | | | 08/16/2002 02:31 PM | Please respond to | canslim | | | | | | | Hi Nancy, | | Let me try and clear up some of your confusion: | | 1. A stock's "rise" does not occur *in* a base, but *between* bases. While | the price will fluctuate up and down within the base itself, the amount of | fluctuation will vary depending on the severity of correction and the time | it takes to form the area of consolidation. The stock is essentially | *absorbing* the gains of its previous advance. | | 2. When you purchase a stock, you will always purchase it as it *breaks | out* | of that base. This preferred buy point is referred to as the "pivot" and is | again defined by the pattern that the base forms. | | 4. When a stock begins a healthy rising pattern after it breaks out, it can | rise *any* amount before it consolidates (bases) again. There is no hard | and | fast rule as to how much it will rise before basing, though WON suggests | that if it is >=25%, the next base would then be considered a "new stage | base." This is only important in that his studies show that most stocks | can't muster the oomph to keep going after they've reached the 3rd or 4th | stage base. | | 3. Mike's question about a sell rule is not dependent on *which* base in | the | base count we are evaluating. A base is a base. If the stock breaks out as | it should and begins to rise, how are you going to handle selling it | when/if | the time comes? | | 4. WON suggests that, if you buy correctly at the pivot (or no more than 5% | above it), that you should never have to suffer a loss of more than 8%. | This | is because, in his studies, he has found that a healthy stock never falls | more than 8% below the pivot before continuing a healthy advance. | | 5. Mike's question, specifically, was "if a stock breaks out of a base, | then | rises 10-15%, then falls back, where do you place your sell stop? 8% below | your buy price or something other than that?" In other words, should you be | willing to accept *any* loss if a stock has managed to rise 10-15% in 6 | wks, | then falls back to where you bought it. My vote is, if it takes 6 wks to | rise and then erases the entire advance, I don't want to take an 8% loss. | If | it rose 10-15% in *one* week and then fell back on low volume, I'd look at | that as "normal" and might consider it a second chance to *buy* more. | | Katherine | | | ----- Original Message ----- | From: "NANCY POLCARO" | To: | Sent: Friday, August 16, 2002 1:47 PM | Subject: Re: [CANSLIM] stop losses and profits | | | | Katherine-let me see if I am following correctly please. My question is | | that previously I understood that after the third rise in a base | formation | a | | stock may correct by dropping below the previous base and then starting | up | | again if all is well with the stock. Then the bases start to be | recounted | | again. In this case, if you just bought in during the third rise in the | | base, which from my understanding would probably go up between 15%(Mikes | | figure) and 25%( the amount of each rise in a base of a healthy stock) | you | | would sell(not you personally but someone with my amount of experience or | | the like) before the 8% drop, to protect your gain. Then follow the | stock | | and watch for a buy in again at some point depending on how the stock | acts | | from this point on? Is that close to correct ??? Thanks for your | thoughts | | Nancy | | | | | | >From: "Katherine Malm" | | >Reply-To: canslim@lists.xmission.com | | >To: | | >Subject: Re: [CANSLIM] stop losses and profits | | >Date: Fri, 16 Aug 2002 13:09:30 -0500 | | > | | >HI Mike, | | > | | >I think you'll get a hundred different answers on this one, so I'll just | | >answer from my personal point of view. | | > | | >If a stock breaks out of a well-formed base on volume, then takes 6 | weeks | | >to | | >rise 10 or 15 percent, then I sure wouldn't want to risk 8% loss at that | | >point, even if it were falling back "normally" as you suggest. To me | that | | >means that no sell signals were triggered on the way up, and that the | | >general pattern included up days on higher volume than down days, | support | | >at | | >the 50 day moving average, etc. My personal preference, however, would | be | | >to | | >move my stop to breakeven or slightly below (3-4% max, depending on | market | | >conditions) if the stock had risen like this. | | > | | >Katherine | | > | | > | | >----- Original Message ----- | | >From: | | >To: | | >Sent: Friday, August 16, 2002 9:17 AM | | >Subject: [CANSLIM] stop losses and profits | | > | | > | | >| Group, | | >| | | >| In reading WON, he makes a statement that you should never let a stock | in | | >| which you are up 10-15% turn into a loss, but I was wondering you have | | >| interpreted that along with the sell at no more than an 8% loss rule. | | >| | | >| Say you buy a stock, at a breakout, and it rises 10-15% over a few (6+ | | >| weeks), and then is started to correct....Do you sell at you break | even | | >| point, or do you allow it to go to your 8% loss point before selling? | | >This | | >| is assuming that the stock is NOT giving any strong sell signals, but | | >| appears to be pulling back "normally". | | >| | | >| Thanks | | >| | | >| Mike Niemotka , PE | | >| Sr. Principal Engineer | | >| Baxter Healthcare Corporation | | >| Route 120 & Wilson Road | | >| Round Lake, IL 60073 | | >| Tel (847) 270-4075 | | >| Fax (847) 270-4525 | | >| michael_niemotka@baxter.com | | >| | | >| | | >| | | >| - | | >| -To subscribe/unsubscribe, email "majordomo@xmission.com" | | >| -In the email body, write "subscribe canslim" or | | >| -"unsubscribe canslim". Do not use quotes in your email. | | > | | > | | >- | | >-To subscribe/unsubscribe, email "majordomo@xmission.com" | | >-In the email body, write "subscribe canslim" or | | >-"unsubscribe canslim". Do not use quotes in your email. | | | | | | | | | | _________________________________________________________________ | | Send and receive Hotmail on your mobile device: http://mobile.msn.com | | | | | | - | | -To subscribe/unsubscribe, email "majordomo@xmission.com" | | -In the email body, write "subscribe canslim" or | | -"unsubscribe canslim". Do not use quotes in your email. | | | - | -To subscribe/unsubscribe, email "majordomo@xmission.com" | -In the email body, write "subscribe canslim" or | -"unsubscribe canslim". Do not use quotes in your email. | | | | | | | | - | -To subscribe/unsubscribe, email "majordomo@xmission.com" | -In the email body, write "subscribe canslim" or | -"unsubscribe canslim". Do not use quotes in your email. - - - -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 #2817 ****************************** 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.