From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2788 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, August 13 2002 Volume 02 : Number 2788 In this issue: Re: [CANSLIM] mgmt ownership Re: [CANSLIM] XRAY and CECO RE: [CANSLIM] specialist RE: [CANSLIM] XRAY and CECO ---------------------------------------------------------------------- Date: Tue, 13 Aug 2002 11:09:07 -0400 From: "Ann" Subject: Re: [CANSLIM] mgmt ownership Thank you, Tom. - ----- Original Message ----- From: "Tom Worley" To: Sent: Tuesday, August 13, 2002 10:27 AM Subject: Re: [CANSLIM] mgmt ownership : Ann, I always want management to have a serious stake in the future of the : company, and for more reasons than the continuation of their salary and : stock options. I want them to share in the ownership, so even with a large : mature company I prefer to see at least 10-15% management ownership. It's : rare to find it, however, as present management is unlikely to be part of : the original founders (MSFT being a rare exception). : : With a small or micro cap company, present day management is more often the : original owners of the company from before they went public. Thus, I expect : and demand far higher ownership. : : ----- Original Message ----- : From: "Ann" : To: : Sent: Tuesday, August 13, 2002 9:57 AM : Subject: Re: [CANSLIM] mgmt ownership : : : Tom, : : No matter what size of the company? (Or do I assume that you mean micro : caps, knowing the stocks you like). WON mentioned 2-3% ownership of the : larger companies as being typical (although he didn't say 'preferable'). : : Ann : ----- Original Message ----- : From: "Tom Worley" : To: : Sent: Tuesday, August 13, 2002 9:49 AM : Subject: Re: [CANSLIM] mgmt ownership : : : : I have owned corps up to 80%, but prefer 40-50% : : : : ----- Original Message ----- : : From: "Ann" : : To: "CANSLIM Listserv" : : Sent: Tuesday, August 13, 2002 9:42 AM : : Subject: [CANSLIM] mgmt ownership : : : : : : I can't seem to find a preferable number (minimum/maximum) for management : : ownership in HTMMIS (and I can't find my 24 Lessons). He just seems to put : : average numbers. : : : : I did see that ownership is likely to be a smaller percentage for older, : : larger cos., because the management has died or moved on! : : : : What do people use? : : : : Thanks, : : : : Ann : : : : : : - : : -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. - - - -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: Tue, 13 Aug 2002 10:18:33 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] XRAY and CECO This is a multi-part message in MIME format. - ------=_NextPart_000_01C2_01C242B2.C7737640 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable HI Mike, I can tell my response wasn't clear. Let me try again with some examples = and articles. In general, it's important to distinguish between a "healthy rising = stock" and a "base." On one hand, you will have a stock, like CECO, = which has been rising over time. Each time is rises for a while, then it = pauses to consolidate. That pause is the "base." Each time the stock = reaches a new high and then consolidates, it will demonstrate its = ability to absorb the gains from the previous rise of >=3D25%. That = pattern that you see along the rising trend line is what you want to see = in a stock. The problem is, after the stock has done this 3 or 4 times, = it becomes well-known and obvious, and so it is rare that it can = continue tracing out this same rising behavior for too much longer. What = will normally happen is that the stock will often fail in the next = breakout and/or correct so deeply that it undercuts the low of the = previous base. That "resets the base count" and you then start over with = counting bases, assuming of course, that the stock *can* recover. WON = suggests that if the correction is more than 80% that the stock is too = badly damaged that it may not recover in any reasonable time period. = (IBM and WMT come to mind....look back at a 10 year chart of each of = them and notice what happened after they corrected so deeply. They = essentially went into years of sideways movement.) Sometimes a picture is worth a thousand words, so thought it easier to = write up some notes. See notes on the "Healthy Rising Stock" at: http://WallStreet-LLC.com/canslim/HealthyRisingStock.JPG Now, far different than the healthy rising stock is the *type* of base = that it forms while consolidating. There are many, though there are some = that are more common, more reliable, and far easier to spot than others. = I'd rank the ascending base as the most difficult to master. See my = handwritten notes on types of bases at: http://WallStreet-LLC.com/canslim/TypesOfBases.JPG Just to be complete, I've also uploaded quite a few resources related to = both rising stocks (base counting) and ascending bases. I figured it was = far easier to do that than to reinvent the wheel and describe the = ascending base in detail. See them at: Counting bases: http://WallStreet-LLC.com/canslim/CountingBasesHowTo.doc http://WallStreet-LLC.com/canslim/DeepCorrResetBCount.JPG http://WallStreet-LLC.com/canslim/CountBasesB4Buy.JPG http://WallStreet-LLC.com/canslim/MktWashoutNewBases.JPG Ascending bases: http://WallStreet-LLC.com/canslim/AscendingBaseRally.JPG http://WallStreet-LLC.com/canslim/FindAscendingBases.doc http://WallStreet-LLC.com/canslim/BuyPointABase.doc In summary, there is no such thing as a "long term ascending base" as = the concept confuses a healthy rising stock pattern over a longer time = period with the ascending base pattern, which is a particular kind of = consolidation (>=3D6wks).=20 CECO has been exhibiting the characteristics of a "healthy rising stock" = and is currently forming a 3rd stage base. CECO is *not* currently = forming an ascending base. It is forming a very strange base on base = (flat + C&H) as far as I can tell. I saw many odd patterns like this at = the September '01 low and many of the stocks were able to recover from = the V shaped sell off, breakout and move on. Many of the retailers, the = gaming stocks, homebuilders, security related stocks and Aero & Defense = come to mind. Katherine ----- Original Message -----=20 From: Mike Gibbons=20 To: canslim@lists.xmission.com=20 Sent: Monday, August 12, 2002 10:20 PM Subject: RE: [CANSLIM] XRAY and CECO Hi Katherine, I just opened my brand new copy of HTMMIS v 3 and found on P. 137-138 = the topic "Ascending Base". The definition is somewhat similar to what = you describe:- "Ascending Bases, like flat bases, occur midway along a = move up after a stock has broken out of a cup-with-handle or = double-bottom base. It has three pullbacks from 10% to 20% with each low = point during the sell-of in price being higher than the preceding, which = is why I call it and ascending base. Each of the pullbacks usually ocurs = due to the general market declining at that time." Looking at your annotated chart, it would seem CECO fits this = definition. It would also seem that the most recent pullback coincided = with the July selloff in the markets in agreement with the definition.=20 Maybe CECO is one to watch. Any other views? Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com -----Original Message----- From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm Sent: Monday, August 12, 2002 3:52 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] XRAY and CECO HI Mike, I've noticed the term "long term ascending base" coming up in many = posts lately, so thought I'd make comment on that concept. There's actually no such thing, as "ascending base" is a very = particular kind of conolidation in the stock's move. In general, a stock = will rise, then pause (base), rise, then pause, rise, then pause, and so = on. As long as the rise between consolidations is at least 25%, the next = area of consolidation is considered a new stage base. This is also the = same reason that an LLUR is not a base....it's a stock on the rise, = though with low volatility. (Sorry, Tom, just a point on which we don't = agree.) The base normally happens when the stock makes a new high, then = falls and/or refuses to continue the up move for some period of time. A = flat base for example, moves essentially sideways for at least 5 wks, = the C&H or cup without handle lasts for at least 7 wks and sports a = deeper correction as the stock retraces some of the previous move, etc. = The ascending base is just an odd consolidation in that it drifts = upward, attempting to breakout 3 times. It's a subtle pattern that's = hard to read, but shouldn't be confused with a stock that is rising = *between* consolidations.=20 I've uploaded an example on the CECO chart that shows the base, move = up, base, move up, etc. http://WallStreet-LLC.com/canslim/CECO081202.jpg Please note that I marked the chart quickly, so the circled areas = for the base are "general" and not exact for each base formation. Katherine ----- Original Message -----=20 From: Mike Gibbons=20 To: canslim@lists.xmission.com=20 Sent: Monday, August 12, 2002 7:54 PM Subject: [CANSLIM] XRAY and CECO When I brought up XRAY last week, Winston observed that the longer = term pattern was more like an ascending base. To my surprize, the XRAY = breakout hasn't failed yet, although it hasn't been strong either, and = may be in the process of forming another handle. I came across another stock today with similar chart = characteristics to XRAY - now in the handle of a Cwh formation with good = CANSLIM characteristics = (http://www.cwhcharts.com/canslim/fuzzy_canslim.php?symbol=3DCECO) = except for v. high institutional ownership - but the longer term pattern = looks like an ascending base. The CwH pattern is not ideal with the cup too short and V-shaped, = which I attribute to the market behavior in July, but perhaps its on its = way to resuming the long term ascending base pattern.=20 Comments anyone? Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com - ------=_NextPart_000_01C2_01C242B2.C7737640 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

HI = Mike,

 

I can tell my response = wasn't=20 clear. Let me try again with some examples and = articles.

 

In general, it's = important to=20 distinguish between a "healthy rising stock" and a "base." On one hand, = you will=20 have a stock, like CECO, which has been rising over time. Each time = is=20 rises for a while, then it pauses to consolidate. That pause is the = "base." Each=20 time the stock reaches a new high and then consolidates, it will = demonstrate its=20 ability to absorb the gains from the previous rise of >=3D25%. That = pattern=20 that you see along the rising trend line is what you want to see in a = stock. The=20 problem is, after the stock has done this 3 or 4 times, it becomes = well-known=20 and obvious, and so it is rare that it can continue tracing out this = same rising=20 behavior for too much longer. What will normally happen is that the = stock will=20 often fail in the next breakout and/or correct so deeply that it = undercuts the=20 low of the previous base. That "resets the base count" and you then = start over=20 with counting bases, assuming of course, that the stock *can* recover. = WON=20 suggests that if the correction is more than 80% that the stock is too = badly=20 damaged that it may not recover in any reasonable time period. (IBM and = WMT come=20 to mind....look back at a 10 year chart of each of them and notice what = happened=20 after they corrected so deeply. They essentially went into years of = sideways=20 movement.)

 

Sometimes a picture is = worth a=20 thousand words, so thought it easier to write up some notes. See notes = on the=20 "Healthy Rising Stock" at:

http://= WallStreet-LLC.com/canslim/HealthyRisingStock.JPG

 

Now, far different than = the healthy=20 rising stock is the *type* of base that it forms while consolidating. = There are=20 many, though there are some that are more common, more reliable, and far = easier=20 to spot than others. I'd rank the ascending base as the most difficult = to=20 master. See my handwritten notes on types of bases at:

http://WallSt= reet-LLC.com/canslim/TypesOfBases.JPG

 

Just to be complete, I've = also=20 uploaded quite a few resources related to both rising stocks (base=20 counting) and ascending bases. I figured it was far easier to do = that than=20 to reinvent the wheel and describe the ascending base in detail. See = them=20 at:

 

Counting = bases:

http://= WallStreet-LLC.com/canslim/CountingBasesHowTo.doc

http:/= /WallStreet-LLC.com/canslim/DeepCorrResetBCount.JPG

=

http://Wal= lStreet-LLC.com/canslim/CountBasesB4Buy.JPG

http://= WallStreet-LLC.com/canslim/MktWashoutNewBases.JPG

 

Ascending = bases:

http://= WallStreet-LLC.com/canslim/AscendingBaseRally.JPG

http://= WallStreet-LLC.com/canslim/FindAscendingBases.doc

http://WallS= treet-LLC.com/canslim/BuyPointABase.doc

 

In summary, there is no = such thing=20 as a "long term ascending base" as the concept confuses a healthy = rising=20 stock pattern over a longer time period with the ascending = base=20 pattern, which is a particular kind of consolidation=20 (>=3D6wks). 

 

CECO has been exhibiting = the=20 characteristics of a "healthy rising stock" and is currently forming a = 3rd stage=20 base. CECO is *not* currently forming an ascending base. It is = forming a=20 very strange base on base (flat + C&H) as far as I can tell. I saw = many odd=20 patterns like this at the September '01 low and many of the stocks = were=20 able to recover from the V shaped sell off, breakout and move on. Many = of the=20 retailers, the gaming stocks, homebuilders, security related stocks and = Aero=20 & Defense come to mind.

 

Katherine

 

 

----- Original Message -----
From:=20 Mike Gibbons
Sent: Monday, August 12, 2002 = 10:20=20 PM
Subject: RE: [CANSLIM] XRAY and = CECO

Hi=20 Katherine,
 
I=20 just opened my brand new copy of HTMMIS v 3 and found on P. 137-138 = the topic=20 "Ascending Base". The definition is somewhat similar to what you = describe:-=20 "Ascending Bases, like flat bases, occur midway along a move up after = a stock=20 has broken out of a cup-with-handle or double-bottom base. It has = three=20 pullbacks from 10% to 20% with each low point during the sell-of in = price=20 being higher than the preceding, which is why I call it and ascending = base.=20 Each of the pullbacks usually ocurs due to the general market = declining at=20 that time."
 
Looking at your annotated chart, it would seem CECO fits this = definition. It would also seem that the most recent pullback coincided = with=20 the July selloff in the markets in agreement with the definition.=20
 
Maybe CECO is one to watch. Any other = views?
 
Aloha,
 
Mike = Gibbons
Proactive = Technologies,=20 LLC
http://www.proactech.com
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of = Katherine=20 Malm
Sent: Monday, August 12, 2002 3:52 PM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] XRAY and = CECO

HI Mike,
 
I've noticed the term "long term ascending base" coming up in = many=20 posts lately, so thought I'd make comment on that concept.
 
There's actually no such thing, as "ascending base" is a very=20 particular kind of conolidation in the stock's move. In general, a = stock=20 will rise, then pause (base), rise, then pause, rise, then pause, = and so on.=20 As long as the rise between consolidations is at least 25%, the next = area of=20 consolidation is considered a new stage base. This is also the same = reason=20 that an LLUR is not a base....it's a stock on the rise, though with = low=20 volatility. (Sorry, Tom, just a point on which we don't = agree.)
 
The base normally happens when the stock makes a new high, then = falls=20 and/or refuses to continue the up move for some = period of=20 time. A flat base for example, moves essentially sideways for at = least 5=20 wks, the C&H or cup without handle lasts for at least 7 wks and = sports a=20 deeper correction as the stock retraces some of the previous move, = etc. The=20 ascending base is just an odd consolidation in that it drifts = upward,=20 attempting to breakout 3 times. It's a subtle pattern that's hard to = read,=20 but shouldn't be confused with a stock that is rising *between*=20 consolidations.
 
I've uploaded an example on the CECO chart that shows the base, = move=20 up, base, move up, etc.
http://WallStre= et-LLC.com/canslim/CECO081202.jpg
 
Please note that I marked the chart quickly, so the circled = areas for=20 the base are "general" and not exact for each base formation.
 
Katherine
----- Original Message ----- =
From:=20 Mike=20 Gibbons
To: canslim@lists.xmission.com= =20
Sent: Monday, August 12, = 2002 7:54=20 PM
Subject: [CANSLIM] XRAY and = CECO

When I brought up XRAY last week, = Winston=20 observed that the longer term pattern was more like an ascending = base. To=20 my surprize, the XRAY breakout hasn't failed yet, although it = hasn't been=20 strong either, and may be in the process of forming another=20 handle.
 
I came across another stock today with = similar=20 chart characteristics to XRAY - now in the handle of a Cwh = formation with=20 good CANSLIM characteristics (http://www.cwhcharts.com/canslim/fuzzy_canslim.php?symbol=3DCECO)=20 except for v. high institutional ownership - but the longer = term=20 pattern looks like an ascending base.
 
The CwH pattern is not ideal with the = cup too=20 short and V-shaped, which I attribute to the market behavior in = July, but=20 perhaps its on its way to resuming the long term ascending base = pattern.=20
 
Comments anyone?
 
Aloha,
 
Mike = Gibbons
Proactive = Technologies,=20 LLC
http://www.proactech.com
=
 
- ------=_NextPart_000_01C2_01C242B2.C7737640-- - - - -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: Tue, 13 Aug 2002 10:28:00 -0500 From: "Edward W. Gjertsen II" Subject: RE: [CANSLIM] specialist I had the privilege of spending an hour with a specialist on the floor of the NYSE. Being of the trader/investor mindset, I was very curious how specialists operated. Like Lucky, I walked away with a much clearer picture. A specialist is what I will call a swing trader. Holding positions (inventory) and trading around this inventory as orders flow in. I asked the specialist about unexpected events when inventory is high. He mentioned even though he and his firm will take a hit on the inventory, there usually is enough order flow to profit from and substantially cut into the loss. Very, very few specialists lose money over any length of time. Check out the price for a seat on the NYSE - it's that high for good reason. Ed Gjertsen II ed@macktracks.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. ------------------------------ Date: Tue, 13 Aug 2002 07:09:28 -1000 From: "Mike Gibbons" Subject: RE: [CANSLIM] XRAY and CECO This is a multi-part message in MIME format. - ------=_NextPart_000_0000_01C24298.5CED1A20 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Lesson for list members: if you really want to learn a subject in depth, pick a fight with Katherine. You will be treated gently, but come away from the experience greatly enlightened. I recommend all the chart reading neophytes on the list check out all the links Katherine provided. Thank you Katherine for the hand drawn chart and uploading all those references. I hope you weren't up all night (I see the time on the posting was 5:19 am) on my account. As someone else asked recently, do you ever sleep? Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm Sent: Tuesday, August 13, 2002 5:19 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] XRAY and CECO HI Mike, I can tell my response wasn't clear. Let me try again with some examples and articles. In general, it's important to distinguish between a "healthy rising stock" and a "base." On one hand, you will have a stock, like CECO, which has been rising over time. Each time is rises for a while, then it pauses to consolidate. That pause is the "base." Each time the stock reaches a new high and then consolidates, it will demonstrate its ability to absorb the gains from the previous rise of >=25%. That pattern that you see along the rising trend line is what you want to see in a stock. The problem is, after the stock has done this 3 or 4 times, it becomes well-known and obvious, and so it is rare that it can continue tracing out this same rising behavior for too much longer. What will normally happen is that the stock will often fail in the next breakout and/or correct so deeply that it undercuts the low of the previous base. That "resets the base count" and you then start over with counting bases, assuming of course, that the stock *can* recover. WON suggests that if the correction is more than 80% that the stock is too badly damaged that it may not recover in any reasonable time period. (IBM and WMT come to mind....look back at a 10 year chart of each of them and notice what happened after they corrected so deeply. They essentially went into years of sideways movement.) Sometimes a picture is worth a thousand words, so thought it easier to write up some notes. See notes on the "Healthy Rising Stock" at: http://WallStreet-LLC.com/canslim/HealthyRisingStock.JPG Now, far different than the healthy rising stock is the *type* of base that it forms while consolidating. There are many, though there are some that are more common, more reliable, and far easier to spot than others. I'd rank the ascending base as the most difficult to master. See my handwritten notes on types of bases at: http://WallStreet-LLC.com/canslim/TypesOfBases.JPG Just to be complete, I've also uploaded quite a few resources related to both rising stocks (base counting) and ascending bases. I figured it was far easier to do that than to reinvent the wheel and describe the ascending base in detail. See them at: Counting bases: http://WallStreet-LLC.com/canslim/CountingBasesHowTo.doc http://WallStreet-LLC.com/canslim/DeepCorrResetBCount.JPG http://WallStreet-LLC.com/canslim/CountBasesB4Buy.JPG http://WallStreet-LLC.com/canslim/MktWashoutNewBases.JPG Ascending bases: http://WallStreet-LLC.com/canslim/AscendingBaseRally.JPG http://WallStreet-LLC.com/canslim/FindAscendingBases.doc http://WallStreet-LLC.com/canslim/BuyPointABase.doc In summary, there is no such thing as a "long term ascending base" as the concept confuses a healthy rising stock pattern over a longer time period with the ascending base pattern, which is a particular kind of consolidation (>=6wks). CECO has been exhibiting the characteristics of a "healthy rising stock" and is currently forming a 3rd stage base. CECO is *not* currently forming an ascending base. It is forming a very strange base on base (flat + C&H) as far as I can tell. I saw many odd patterns like this at the September '01 low and many of the stocks were able to recover from the V shaped sell off, breakout and move on. Many of the retailers, the gaming stocks, homebuilders, security related stocks and Aero & Defense come to mind. Katherine ----- Original Message ----- From: Mike Gibbons To: canslim@lists.xmission.com Sent: Monday, August 12, 2002 10:20 PM Subject: RE: [CANSLIM] XRAY and CECO Hi Katherine, I just opened my brand new copy of HTMMIS v 3 and found on P. 137-138 the topic "Ascending Base". The definition is somewhat similar to what you describe:- "Ascending Bases, like flat bases, occur midway along a move up after a stock has broken out of a cup-with-handle or double-bottom base. It has three pullbacks from 10% to 20% with each low point during the sell-of in price being higher than the preceding, which is why I call it and ascending base. Each of the pullbacks usually ocurs due to the general market declining at that time." Looking at your annotated chart, it would seem CECO fits this definition. It would also seem that the most recent pullback coincided with the July selloff in the markets in agreement with the definition. Maybe CECO is one to watch. Any other views? Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm Sent: Monday, August 12, 2002 3:52 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] XRAY and CECO HI Mike, I've noticed the term "long term ascending base" coming up in many posts lately, so thought I'd make comment on that concept. There's actually no such thing, as "ascending base" is a very particular kind of conolidation in the stock's move. In general, a stock will rise, then pause (base), rise, then pause, rise, then pause, and so on. As long as the rise between consolidations is at least 25%, the next area of consolidation is considered a new stage base. This is also the same reason that an LLUR is not a base....it's a stock on the rise, though with low volatility. (Sorry, Tom, just a point on which we don't agree.) The base normally happens when the stock makes a new high, then falls and/or refuses to continue the up move for some period of time. A flat base for example, moves essentially sideways for at least 5 wks, the C&H or cup without handle lasts for at least 7 wks and sports a deeper correction as the stock retraces some of the previous move, etc. The ascending base is just an odd consolidation in that it drifts upward, attempting to breakout 3 times. It's a subtle pattern that's hard to read, but shouldn't be confused with a stock that is rising *between* consolidations. I've uploaded an example on the CECO chart that shows the base, move up, base, move up, etc. http://WallStreet-LLC.com/canslim/CECO081202.jpg Please note that I marked the chart quickly, so the circled areas for the base are "general" and not exact for each base formation. Katherine ----- Original Message ----- From: Mike Gibbons To: canslim@lists.xmission.com Sent: Monday, August 12, 2002 7:54 PM Subject: [CANSLIM] XRAY and CECO When I brought up XRAY last week, Winston observed that the longer term pattern was more like an ascending base. To my surprize, the XRAY breakout hasn't failed yet, although it hasn't been strong either, and may be in the process of forming another handle. I came across another stock today with similar chart characteristics to XRAY - now in the handle of a Cwh formation with good CANSLIM characteristics (http://www.cwhcharts.com/canslim/fuzzy_canslim.php?symbol=CECO) except for v. high institutional ownership - but the longer term pattern looks like an ascending base. The CwH pattern is not ideal with the cup too short and V-shaped, which I attribute to the market behavior in July, but perhaps its on its way to resuming the long term ascending base pattern. Comments anyone? Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com - ------=_NextPart_000_0000_01C24298.5CED1A20 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Lesson for list members: if you really want to learn a subject = in depth,=20 pick a fight with Katherine. You will be treated gently, but come = away from=20 the experience greatly enlightened. I recommend all the chart reading = neophytes=20 on the list check out all the links Katherine = provided.
 
Thank=20 you Katherine for the hand drawn chart and uploading all those = references. I=20 hope you weren't up all night (I see the time on the posting was 5:19 = am) on my=20 account. As someone else asked recently, do you ever = sleep?
 
Aloha,
 
Mike = Gibbons
Proactive = Technologies,=20 LLC
http://www.proactech.com
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine = Malm
Sent: Tuesday, August 13, 2002 5:19 AM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] XRAY and=20 CECO

HI = Mike,

 

I can tell my response = wasn't=20 clear. Let me try again with some examples and = articles.

 

In general, it's = important to=20 distinguish between a "healthy rising stock" and a "base." On one = hand, you=20 will have a stock, like CECO, which has been rising over time. = Each time=20 is rises for a while, then it pauses to consolidate. That pause is the = "base."=20 Each time the stock reaches a new high and then consolidates, it will=20 demonstrate its ability to absorb the gains from the previous rise of=20 >=3D25%. That pattern that you see along the rising trend line is = what you=20 want to see in a stock. The problem is, after the stock has done this = 3 or 4=20 times, it becomes well-known and obvious, and so it is rare that it = can=20 continue tracing out this same rising behavior for too much longer. = What will=20 normally happen is that the stock will often fail in the next breakout = and/or=20 correct so deeply that it undercuts the low of the previous base. That = "resets=20 the base count" and you then start over with counting bases, assuming = of=20 course, that the stock *can* recover. WON suggests that if the = correction is=20 more than 80% that the stock is too badly damaged that it may not = recover in=20 any reasonable time period. (IBM and WMT come to mind....look back at = a 10=20 year chart of each of them and notice what happened after they = corrected so=20 deeply. They essentially went into years of sideways=20 movement.)

 

Sometimes a picture is = worth a=20 thousand words, so thought it easier to write up some notes. See notes = on the=20 "Healthy Rising Stock" at:

http://= WallStreet-LLC.com/canslim/HealthyRisingStock.JPG

 

Now, far different than = the=20 healthy rising stock is the *type* of base that it forms while = consolidating.=20 There are many, though there are some that are more common, more = reliable, and=20 far easier to spot than others. I'd rank the ascending base as the = most=20 difficult to master. See my handwritten notes on types of bases = at:

http://WallSt= reet-LLC.com/canslim/TypesOfBases.JPG

 

Just to be complete, = I've also=20 uploaded quite a few resources related to both rising stocks (base=20 counting) and ascending bases. I figured it was far easier to do = that=20 than to reinvent the wheel and describe the ascending base in detail. = See them=20 at:

 

Counting = bases:

http://= WallStreet-LLC.com/canslim/CountingBasesHowTo.doc

http:/= /WallStreet-LLC.com/canslim/DeepCorrResetBCount.JPG

=

http://Wal= lStreet-LLC.com/canslim/CountBasesB4Buy.JPG

http://= WallStreet-LLC.com/canslim/MktWashoutNewBases.JPG

 

Ascending = bases:

http://= WallStreet-LLC.com/canslim/AscendingBaseRally.JPG

http://= WallStreet-LLC.com/canslim/FindAscendingBases.doc

http://WallS= treet-LLC.com/canslim/BuyPointABase.doc

 

In summary, there is no = such=20 thing as a "long term ascending base" as the concept confuses a = healthy=20 rising stock pattern over a longer time period with the = ascending=20 base pattern, which is a particular kind of consolidation=20 (>=3D6wks). 

 

CECO has been = exhibiting the=20 characteristics of a "healthy rising stock" and is currently forming a = 3rd=20 stage base. CECO is *not* currently forming an ascending base. It = is=20 forming a very strange base on base (flat + C&H) as far as I can = tell. I=20 saw many odd patterns like this at the September '01 low and many = of the=20 stocks were able to recover from the V shaped sell off, breakout and = move on.=20 Many of the retailers, the gaming stocks, homebuilders, security = related=20 stocks and Aero & Defense come to mind.

 

Katherine

 

 

----- Original Message -----
From:=20 Mike Gibbons
Sent: Monday, August 12, 2002 = 10:20=20 PM
Subject: RE: [CANSLIM] XRAY = and=20 CECO

Hi Katherine,
 
I=20 just opened my brand new copy of HTMMIS v 3 and found on P. 137-138 = the=20 topic "Ascending Base". The definition is somewhat similar to what = you=20 describe:- "Ascending Bases, like flat bases, occur midway along a = move up=20 after a stock has broken out of a cup-with-handle or double-bottom = base. It=20 has three pullbacks from 10% to 20% with each low point during the = sell-of=20 in price being higher than the preceding, which is why I call it and = ascending base. Each of the pullbacks usually ocurs due to the = general=20 market declining at that time."
 
Looking at your annotated chart, it would seem CECO fits = this=20 definition. It would also seem that the most recent pullback = coincided with=20 the July selloff in the markets in agreement with the definition.=20
 
Maybe CECO is one to watch. Any other = views?
 
Aloha,
 
Mike = Gibbons
Proactive = Technologies,=20 LLC
http://www.proactech.com
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of = Katherine=20 Malm
Sent: Monday, August 12, 2002 3:52 PM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] XRAY = and=20 CECO

HI Mike,
 
I've noticed the term "long term ascending base" coming up in = many=20 posts lately, so thought I'd make comment on that concept.
 
There's actually no such thing, as "ascending base" is a very = particular kind of conolidation in the stock's move. In general, a = stock=20 will rise, then pause (base), rise, then pause, rise, then pause, = and so=20 on. As long as the rise between consolidations is at least 25%, = the next=20 area of consolidation is considered a new stage base. This is also = the=20 same reason that an LLUR is not a base....it's a stock on the = rise, though=20 with low volatility. (Sorry, Tom, just a point on which we don't=20 agree.)
 
The base normally happens when the stock makes a new high, = then falls=20 and/or refuses to continue the up move for some = period of=20 time. A flat base for example, moves essentially sideways for at = least 5=20 wks, the C&H or cup without handle lasts for at least 7 wks = and sports=20 a deeper correction as the stock retraces some of the previous = move, etc.=20 The ascending base is just an odd consolidation in that it drifts = upward,=20 attempting to breakout 3 times. It's a subtle pattern that's hard = to read,=20 but shouldn't be confused with a stock that is rising *between*=20 consolidations.
 
I've uploaded an example on the CECO chart that shows the = base, move=20 up, base, move up, etc.
http://WallStre= et-LLC.com/canslim/CECO081202.jpg
 
Please note that I marked the chart quickly, so the circled = areas for=20 the base are "general" and not exact for each base = formation.
 
Katherine
----- Original Message ----- =
From:=20 Mike=20 Gibbons
To: canslim@lists.xmission.com= =20
Sent: Monday, August 12, = 2002 7:54=20 PM
Subject: [CANSLIM] XRAY = and=20 CECO

When I brought up XRAY last week, = Winston=20 observed that the longer term pattern was more like an ascending = base.=20 To my surprize, the XRAY breakout hasn't failed yet, although it = hasn't=20 been strong either, and may be in the process of forming another = handle.
 
I came across another stock today = with similar=20 chart characteristics to XRAY - now in the handle of a Cwh = formation=20 with good CANSLIM characteristics (http://www.cwhcharts.com/canslim/fuzzy_canslim.php?symbol=3DCECO)=20 except for v. high institutional ownership - but the longer = term=20 pattern looks like an ascending base.
 
The CwH pattern is not ideal with the = cup too=20 short and V-shaped, which I attribute to the market behavior in = July,=20 but perhaps its on its way to resuming the long term ascending = base=20 pattern.
 
Comments anyone?
 
Aloha,
 
Mike = Gibbons
Proactive = Technologies,=20 LLC
http://www.proactech.com
=
 
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